TOKYO -- Investors expect the yen to depreciate only slightly or even strengthen if the Bank of Japan decides next week to further ease monetary policy, while the central bank faces a dilemma over when to play its few remaining cards.
"Even if the bank implements additional easing, the yen is only going to weaken for the first few minutes," Daisuke Karakama of Mizuho Bank said of the two-day BOJ policy meeting starting July 28. Karakama predicted that the currency will end up strengthening regardless of the bank's decision, since most investors already expect more monetary stimulus, and not easing would only disappoint the market.
