Citigroup recommends dollar-yen trade ahead of BOJ decision

Citigroup FX strategists recommended buying a one-month USD/JPY call spread ahead of the Bank of Japan’s policy decision, expecting a rebound in dollar-yen after a sharp intraday yen surge. The pair fell 2.5% to 159.40 as traders suspected possible official intervention by Tokyo to support the yen. Citi argued BOJ Governor Kazuo Ueda is unlikely to sound hawkish enough to meet market expectations, which could disappoint yen bulls and support a bounce in USD/JPY. The suggested trade targets a recovery above 160.50, with maximum payoff at 162. The article signals near-term volatility in USD/JPY driven by central-bank policy risk and intervention concerns.