Lee Hardman, Currency Analyst at MUFG, notes that the yen has continued to strengthen modestly in the Asian trading session although USD/JPY has not yet retested key support at the 112.00-level which has held for almost a month now. Key Quotes “The yen has remained relatively stable at stronger levels over the past month despite the recent relief rebound in risk assets providing a bullish signal for the outlook for the yen. It appears increasingly likely that the yen’s sharp gains from earlier this year are likely to be sustained which is consistent with our Tokyo analysts updated forecasts for USD/JPY. The BoJ is likely to find it increasingly difficult to re-weaken the yen through further monetary easing. Recent economic developments in Japan are continuing to place pressure on the BoJ to deliver further monetary easing ahead of the elections in the summer. The Japanese economy appears to have started the year weakly following the contraction at the end of last year. However, the BoJ is not expected to provide additional stimulus as early as at next week’s meeting following on so soon from their decision to implement a negative rate. BoJ Governor Kuroda stated clearly earlier this week that he doesn’t think the BoJ needs to take further policy action now. The comments have provided further support the yen in the near-term.” For more information, read our latest forex news.