If BOJ refrains, strategists still see more stimulus by end of year A move by the Bank of Japan on Friday to fortify its stimulus program could put the U.S. currency on a path toward a market milestone that analysts have been penciling in since the dollar rally began in mid-2014: ¥130. The dollar hasn’t traded at that level since May 2002, according to FactSet data. After appreciating by 15% against the yen USDJPY, +0.01% in 2014, the dollar is up less than 1% this year. Since January, the buck has posted fresh 12-year highs against the yen on several occasions, only to retreat due to the Federal Reserve’s reluctance to raise interest rates. Most recently, the dollar rose to a 12-year high against the yen on June 5, when it hit ¥125.77, according to FactSet data. On Thursday, a dollar bought ¥121.10, little-changed from its level late Wednesday. The dollar’s minuscule year-to-date gains have been due to an “interlude” in the trend of monetary policy divergence, according to a team of currency strategists at Goldman Sachs. But now that the Federal Reserve is once again flirting with the notion of a December liftoff—and its rivals appear ready to expand their easing efforts—circumstances have once again aligned to push the dollar higher. And if the BOJ expands its stimulus program, it will help lure investors out of the yen, and into risk assets—potentially taking the dollar close to Goldman’s 12-month target of ¥130, the strategists said.If not now, soon Even if the Bank of Japan refrains on Friday, more stimulus is likely in the near term. “If they don’t go now, they will probably go some time later in Q4,” said Win Thin, global head of emerging-market currency strategy at Brown Brothers Harriman. On the other hand, if the Bank of Japan holds off on Friday, the dollar would likely weaken in the short term, said Kit Juckes, global strategist at Société Générale, in a note. SocGen expects the Bank of Japan to ease. But if it doesn’t deliver, the subsequent fall by the dollar/yen pair would likely be larger than the move that would occur if the Bank of Japan does provide more stimulus, Juckes said.Further easing would be “more likely to be equity-friendly than yen-negative.”A repeat of last year? The Bank of Japan is currently buying ¥80 trillion ($664 billion) in Japanese government bonds (commonly referred to as JGBs) annually. It also buys trillions of yen worth of ETFs, J-REITS and corporate debt. Last October, the central bank surprised the market by quickening the pace of its JGB purchases, but leaving its value quotas for other assets untouched. Strategists expect a similar move this time around. After the Bank of Japan is out of the way, investors will turn their attention to the Bank of England’s meeting on Nov. 5, where many expect to receive guidance on the timing of its first interest rate increase in nine years. More from MarketWatch