SHANGHAI, Apr 21 (SMM) - Global asset management giant UBS has turned bullish on the yen as the Bank of Japan's (BOJ) April monetary policy meeting looms, betting that the Bank of Japan will consider tweaking its ultra-loose monetary policy stance in the coming months.
Recently, Adrian Zuercher, head of global asset allocation at UBS, said in an interview that the yen may appreciate by 10% against the dollar in the next few months, and "technically it may far exceed this level."
A few months ago, BOJ stunned global markets by doubling the cap on 10-year bond yields to 0.5% in a surprise move. Today, Japan's rising inflation and illiquid bond markets continue to fuel speculation about policy changes.
Some traders had expected the bank to adjust policy at the monetary policy meeting taking place soon.
Overall, most economists believe that BOJ officials are cautious about adjusting or removing its yield curve control policy, or YCC policy.
According to a foreign media survey of 47 economists, 41 (87%) respondents do not expect any monetary policy changes at the BOJ's April meeting, while 5 expect policy adjustments.
UBS expects the yen to rise to around 120 per dollar by the end of the year. As of Friday, the dollar was trading around 134 yen against the yen,
"Even if the BOJ stays on hold, it won't affect us (strategy). Once they get going, they move quickly. " Zuercher said.
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