The Bank of Japan’s stimulus is building a wall against the yen gaining beyond ¥100 to the dollar, amid an investor flight into the currency as a haven, according to Nomura Holdings Inc.

The yen has climbed 3 percent against the greenback this year, set for its biggest first-quarter advance since March 2008, when the global financial crisis was about to unfold. The median forecast of analysts in a Bloomberg survey held at ¥110 by year-end even after the yen strengthened to a four-month high of ¥100.76 on Feb. 4.

“An image of a firm floor for dollar-yen is forming,” said Shogo Fujita, a strategist at Bank of America Merrill Lynch in Tokyo. “That is one spill-over effect from the BOJ’s Japanese government bond buying.”

BOJ Gov. Haruhiko Kuroda is facing calls to expand the central bank’s about ¥7 trillion in monthly bond-buying as the nation braces for an economic contraction after a consumption tax hike next month. Even without additional measures, the supply of the currency continues to grow, weighing on the yen, according to Yunosuke Ikeda, the head of foreign exchange strategy at Nomura.

“It’s a misperception to think no further easing is an end to stimulus,” Ikeda said. “The ¥100 level is a very solid floor.”

Kuroda said last week the stimulus is having its intended effects, even as Japan is only half way to the bank’s 2 percent inflation target. Thirty-five percent of the 34 economists surveyed expect the bank to expand the program as early as next month, according to the most recent Bloomberg News survey conducted Feb. 26 to March 4.

Federal Reserve Chair Janet Yellen signaled last week that the U.S. central bank may start to raise rates in the middle of next year with the world’s largest economy showing signs of resilience. The BOJ is expanding its asset holdings 20 percent this year to ¥290 trillion, adding to a 42 percent jump last year, as it’s providing an unprecedented amount of funds to end 15 years of deflation.

“By continuing its current open-ended policy, the BOJ is winning the race in boosting balance sheets with the Fed,” Ikeda said. “Expectations for unnecessary further easing are meaningless.”

The extra yield investors can get by holding two-year U.S. Treasuries instead of JGBs will almost double by the year-end, based on separate economists’ estimates, boosting the appeal of the greenback. The spread will climb to 69 basis points from 37 Monday.

Japan’s benchmark 10-year bonds yielded 0.595 percent Monday, the lowest in the world. That compares with 2.75 percent for similar-maturity Treasuries. The yen traded at ¥102.36 against the dollar on Monday in Tokyo.

“The effect of Kuroda magic is based on how firmly he has laid the groundwork for easing and how he will commit to it no matter what for a few years,” said Naohiko Baba, chief Japan economist in Tokyo at Goldman Sachs Group Inc. and a former BOJ official. “This premise allows for the U.S. recovery story to be successful in inducing a weaker yen.”

The yen rebounded this year after an 18 percent plunge in 2013 as emerging markets turmoil spurred investors to seek haven in the currency. Russia’s seizure of Ukraine’s Crimea region triggered another flight to safety.

The pause in the yen’s sharp depreciation has helped reduce inflation pressures from high import prices and could prompt the bank to provide more stimulus in October to achieve its inflation target, said Marcel Thieliant, a Singapore-based economist at Capital Economics. He predicts the BOJ will probably buy an additional ¥75 trillion next year and 10-year bond yields will rise to 1 percent by the end of 2015.

Diverging monetary policy directions between the BOJ and the U.S. Federal Reserve have given assurances for speculators to maintain their yen short positions, limiting the risk of the yen shooting up and offsetting any potential disappointment arising from a lack of further easing.

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