بى ان بى باريبا
Long USD and NZD vs. JPY ahead of policy meetings
A raft of policy announcements is due tomorrow: the FOMC, RBNZ and BoJ will take centre stage. The FOMC will be a key
focus and we remain of the view that the risks are skewed to a USD friendly reaction given how little tightening is priced in over
the next six months. We expect the RBNZ to leave rates on hold and think that a neutral message could bolster the NZD. We
entered a short AUDNZD recommendation at 1.0225 in the past week, targeting a move down to 0.98 in the cross in addition to
an existing long NZDJPY options trade. In Japan, our economists see little appetite for further easing by the BoJ despite
slumping inflation expectations. Notwithstanding this, we think the risk-reward of being long USDJPY is attractive into the
meeting. We added a recommendation to buy short-dated 25-delta USDJPY calls last week.