Officials are likely to step up verbal intervention closer to 145 in USD/JPY, in the opinion of economists at Société Générale.

Widening of 10y JGB yield range in July

We now forecast a widening in the range for the 10y JGB yield from /- 0.50% to 1.00% at the next meeting in July. This may however depend on the FOMC meeting in the US. The outlook for USD/JPY is clouded by the timing of the BoJ but also by the Fed. 

A further widening of UST/JGB differentials in the run-up to the July meeting and acceleration of USD/JPY beyond 145 could see the return of FX intervention. 

Speculation of a general election this autumn also clouds the outlook for the currency and policy adjustment by the BoJ.