Nomura notes that "although expectations for....>

YEN: Nomura notes that "although expectations for BOJ policy tweaks are higher,

we do not believe market fully anticipates this decision. A likely tweak to ETF

purchase ops may not surprise investors, and the impact on FX would likely be

muted. However, the swift decision to allow for a wider range of 10-Year yields

would come as a surprise to most. In the short term, before the fixed price

operation is conducted at the new level, JGB yields would likely rise &

volatility would increase, which would be JPY positive. The credibility of the

BOJ's accommodative stance may be doubted in the near term & the BOJ would needs

to show that dovish stance is unchanged in a patient manner. In the short term,

we see downside risks for USD/JPY testing Y110. In the medium term, we expect

JPY weakness to resume. Exp. tweaks aim at improving the sustainability of the

current framework & we expect the BOJ to keep its 10-Year yield target unchanged

at around 0% for a longer period. As a result, after the short-term rise in the

volatility of JGB yields, rate spreads against the US & euro area will likely

resume widening. JPY short positions will likely be attractive after the BOJ

conducts the fixed price operation, capping the upside room of 10-Year yields."