Economists at MUFG see as more likely than not that the BoJ will shift its policy by altering the current YCC framework. Therefore, USD/JPY is set to fall sharply.

BoJ YCC speculation to build 

We are anticipating a build-up in speculation of a change to YCC as we move toward the BoJ policy meeting on 28th July. While it seems more likely than not now that the FOMC will hike on 26th July, the market is now fully priced for that and we still have the key CPI data this week, which shows a strong consensus of further declines in inflation. 

The balance of risk for core CPI seems to be more skewed toward a weaker print given the fact that housing-related inflation seems to be declining. But the Yen should find better support at these levels. 

Expectations on a YCC change may have started to build this week but expectations remain low so there is scope for a shift in expectations to help the Yen. The rhetoric from the MoF also points to greater opposition to Yen depreciation and Leveraged Funds remain very short at present.