Nomura Research discusses its expectations for next week's BoJ and ECB policy meetings.
"We see limited room for JPY to strengthen from here, expecting a gradual rise of USD/JPY toward 110 and above. There will be BOJ and ECB meetings next week, while both central banks will stay on the sidelines for now to gauge the impact of previous easing measures," Nomura notes.
EU recovery fund discussions into the EU summit on 17-18 July will be more crucial for EUR/JPY. If an agreement is reached next week, it will be a positive surprise, although the agreement is more likely to be postponed toward the end of July. However, as long as discussions on the fund continue, peripheral government bonds and EUR/JPY will still likely be supported," Nomura adds.