The BOJ is scheduled to meet on April 3-4 to decide on the direction of their monetary policy with a statement expected at the conclusion of this meeting. This has to be one of the more anticipated announcements in recent times as the onus is on them to outline a credible policy that will reflate their economy.
Kuroda, the newly appointed BOJ governor and the presumed ally of PM Abe, has been quite vocal in his support for monetary easing and the effects that will have in stimulating the dormant economy. So, what can they be expected to do? The market is understandably divided on this but the consensus seems to be that they will have to, at the very least, undertake these steps: 1) implement additional asset purchases over and above the 10 trillion YEN already in place and 2) start open-ended purchases earlier as they seek to expand their balance sheet. A quick peek at the USD/JPY chart would seem to suggest that the discounting mechanism that is the market has gotten quite optimistic about the prospects of meaningful policy changes in Japan over the course of the past few months.
So, with expectations at such an elevated level, the risk is that the BOJ is not aggressive enough which could put pressure on dlr/yen and the yen crosses in the short-term. But, as long as the market believes that they seem committed to bolder policy responses, any possible declines should be contained by supports at 92.00, 90.80 and 90 level as the pair turns its' attention towards the 100 level.