HSBC - "The financial crisis has forced policymakers into some radical choices to underpin the global economy and financial system. Yet now, the market seems to be adopting a different radical notion – that the world is returning to normal and policy with it. FX markets flirt with the idea that the Fed may be ready to turn off the liquidity tap before too long. They ponder life without further monetary easing in the Eurozone or the UK. They look for China’s economic growth to return to the normal rates of the past. Yet amid this potentially premature expectation for a return to the mundane, markets expect Japan to embark on the most radical of policy adventures, pursuing much higher inflation through an aggressive easing of fiscal and monetary policy. We have our doubts about delivery, but the probability of such an outcome has clearly risen, and it is correct that this should be partly reflected in the JPY for now. In the end, however, it comes down to a binary choice. Will Japan’s policymakers deliver? We maintain not."