According to Nomura's Global FX Strategy Team, the BOJ is facing a difficult choice, ahead of the highly uncertain UK referendum, noting that they currently judge July is the more likely timing for the next BOJ easing and the Bank is more likely to stay on the sidelines for now.Key Quotes"A surprise easing cannot be ruled out, but a sustained positive impact depends on the policy measures used. We summarise our view on the expected USD/JPY reaction to the BOJ’s decision. However, risks of a surprise easing cannot be ruled out.""Apparently, market expectations for a BOJ easing this week are lower than expectations into the April meeting. The survey conducted by Nikkei Quick (6 June) showed that only 23% expected the BOJ to announce additional easing on 16 June, while the majority (57%) of market participants expect the Bank to ease by July’s meeting.""Ahead of April’s meeting, our client survey showed 60% expected an April easing. USD/JPY depreciated rapidly after the BOJ’s disappointment from nearly 112 to 108, but the negative reaction to the BOJ not easing this time should be smaller. Brexit uncertainty has been the dominant factor for the FX market at the moment too. As a result, investors should be cautious on opinion poll results, which could move JPY in the opposite direction, if the remain camp regains momentum""USD/JPY is still likely to temporarily test this year’s low (105.55). However, because of limited expectations for a BOJ easing this time and the cautious risk-taking stance ahead of the UK referendum, USD/JPY should stabilise around 105.50-106.00 by the end of the day (A). Beyond the daily reaction, if opinion polls remain tight into the UK referendum, further appreciation of JPY is possible though"