Analysts at HSBC Holdings Plc in a report on Thursday, citing “high” expectations for the Bank of Japan meeting, see three scenarios: disappointment (causing a sharp weakening in the yen relative to the U.S. dollar in the short-term), greater monetary stimulus (a strong yen in the short-term) and helicopter money.
The analysts write: “For the first two scenarios we would expect the medium term impact on USDJPY to be limited, although the short-term reaction would likely be different”. Only helicopter money — a permanent addition to the monetary base — would deliver a weaker yen in the medium-term, they say.
“We still expect the BOJ to cut rates and increase the pace of asset buying modestly,” Societe Generale SA analysts write, adding that markets would be “disappointed” if Japan’s central bank withheld its monetary firepower.

Source: Bloomberg