The Japanese Yen remains very much in demand ahead of Wednesday's BoJ decision. In the view of economists at ING, the USD/JPY pair could slump to 126.50.

Focus this week is the BoJ meeting on Wednesday

“Further adjustments to its JGB targets are in focus and investors are positioning for this with higher longer-dated swap rates.”

“10-year Japanese swap rates have pushed another 5 bps higher overnight to the highest levels in a decade.”

“We suspect USD/JPY can trade down to 126.50 before Wednesday.”