FXStreet (Edinburgh) - Analyst at Danske Bank Mikael Milhoj believes the Japanese currency could depreciate further ahead of the next BoJ meeting in late October. Key Quotes “USD/JPY dropped back to the 120 level this morning as Bank of Japan (BoJ) kept its annual rise in monetary base unchanged at JPY80trn at its monetary policy meeting”. “It was widely expected that the BoJ would leave its monetary policy unchanged but pricing action post the announcement suggests that some investors were positioned for a surprise from the BoJ today”. “The next BoJ meeting will be on 30 October and here the BoJ will almost certainly revise down its inflation forecast in its semi-annual outlook report”. “A downward revision of its CPI forecast for FY 2016 could trigger a policy response from BoJ. We do not expect BoJ to ease further on 30 October but it will probably be a close call and we expect the JPY to weaken further going in to the meeting as the market should price in a higher probability of BoJ easing”. For more information, read our latest forex news.