ING notes that:
“The Bank of Japan is now garnering much more focus than it has in years. Most pressing is the replacement of Governor Haruhiko Kuroda, who leaves in April. A successor will be presented to parliament on 10 February. The favourite, Deputy Governor Masayoshi Amamiya, is seen as the dovish continuity candidate.”
“Any surprise choice of the more hawkish Hiroshi Nakaso could probably send the Yen a lot stronger, with pressure building for 10-year JGB yields to burst above their current 0.50% ceiling.”
“USD/JPY has mainly been driven by the weaker dollar story, but 120 looks like the target this year, helped by the BOJ and lower energy prices.”
Well, it’s a trade that I would say that timing is also somewhat important as rate differentials are still very much in favour of the dollar at the moment (them swaps can be painful).