USD/JPY: Credit Agricole bank continues to recommend buying in light of monetary policy divergence, aims for 126.30

In a note published this morning, Credit Agricole reiterated its bullish view on the USD/JPY:

"The BoJ left its monetary policy unchanged at its meeting on Friday, but decided to postpone the deadline to achieve its 2% inflation target to the midpoint of fiscal year 2016.

At the same time, growth forecasts have significantly lowered. This suggests that QE will remain in place for longer than expected. However, it is not certain that the current policy is sufficient to improve inflation in the long run.

We therefore continue to believe that the BoJ will ultimately have to adopt a more aggressive monetary policy, in contrast to the Fed which is preparing to tighten its monetary policy.

We therefore continue to believe that prospects for monetary policy divergence justify buying USD/JPY, and we continue to aim for an upward movement toward 126.30."