COMMENT-Yen and BoJ: The only certainty is uncertainty

The yen looks set for further volatility in 2024 after Bank of Japan Governor Kazuo Ueda gave no clear hint on when the central bank might exit its ultra-loose monetary policy, which it maintained on Tuesday.

The BoJ's policy hold and lack of forward guidance hit the yen hard, with USD/JPY jumping to threaten 145 - days after it sank to a four-and-a-half month low circa 141 following the Federal Reserve's dovish pivot on Dec. 13.

USD/JPY might return south if speculation about a possible hawkish BoJ pivot as early as Jan. 23 emerges at the start of the new year, or climb further if the BoJ seems in no hurry to change its monetary policy course.

The impact of today's BoJ meeting on FX positioning will be revealed on Friday, when CFTC data for the week ended Dec. 19 is published. The latest CFTC data showed the net JPY short position shrank by a fifth to 81,131 contracts in the week ended Dec. 12.

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