UBS(UBS), the world's third-largest foreign-exchange trading bank has slashed its forecasts for the yen on both the one-month and three-month horizon, citing surprise monetary easing steps from the Bank of Japan.
The Swiss bank now expects the dollar to trade at Y80 in a month's time and at Y85 on the three-month horizon. Both views have been revised up from Y77 previously. UBS cited the Bank of Japan's decision last week to expand its asset purchase facility by Y10 trillion, which now stands at Y65 trillion.
"Regardless of the reasons behind the BOJ's sudden switch in attitude, the quantities involved in their potential asset purchases are significant and we expect aggressive deployment of the balance sheet to meet their inflation mandate," UBS said in a note to clients
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