USD/JPY headed to 112.50? - Scotiabank

Analysts at Scotiabank noted that the BoJ made no policy changes and no material adjustments to its growth and CPI forecasts. 

Key Quotes:

"Relative central bank policy remains bearish for JPY, with downside risk on the back of a renewed widening in interest rate differentials.'

"Measures of implied JPY volatility are softening, and risk reversals hint to an erosion in the premium for protection against JPY strength. We remain bearish JPY."

"We look to gains through the 50 day MA and this week’s high in the 111.80 area, toward 112.50. Near-term support is expected at 111."