The Japanese yen rallied across the majors, even beating out the US dollar, as a more-than 3 percent plunge in some European equity indices and a 2.13 percent drop in the DJIA signaled wide-spread risk aversion, weighing on FX carry trades. While risk trends will likely continue to determine price action for the Japanese yen crosses, the currency will face some event risk overnight. Just before midnight, the Bank of Japan is anticipated to announce that they are leaving rates unchanged at 0.10 percent, but this is not the part of the central bank’s announcement that will garner the most attention. Instead, the FX markets may only respond to the sentiment reflected in their subsequent policy statement. After the BOJ’s last meeting, they raised their outlook on the economy for the first time in nearly 3 years, saying that “economic conditions have been deteriorating, but exports and production are beginning to level out.” There is speculation that the BOJ will upgrade their outlook once again, and if this is the case, the Japanese yen could gain on a very short-term basis. On a longer-term basis, though, risk trends have been driving price action and the impact of positive BOJ commentary may not go very far.