Mitsubishi UFJ: The Bank of Japan is expected to keep interest rates unchanged; USD/JPY may test 165, increasing the risk of intervention

Takafumi Onodera, Head of Sales and Trading at Mitsubishi UFJ Trust and Banking in New York, said that the Bank of Japan may keep interest rates unchanged at its meeting this week, which could push USD/JPY up to 165 and increase the risk of intervention by Japanese officials in the foreign exchange market. "USD/JPY may briefly test 165, but as concerns about intervention rise in the market, further upside should be limited," he said in an interview. The Bank of Japan "may release a hawkish signal to curb further weakening of the yen." He added that if the Bank of Japan does not raise interest rates at all this year, while the Federal Reserve raises rates, USD/JPY could move toward 170.