Expectations of a renewed divergence between Japanese and U.S. monetary policy weighed on the yen on Friday as markets mulled the first major business sentiment surveys on the health of the European economy since last month’s Brexit vote.

In early trade in London, the yen was down 0.3 per cent on the day, having recovered from six-week lows after Bank of Japan Governor Haruhiko Kuroda dented speculation it may be preparing a radical “helicopter money” economic stimulus.

That has not shifted many investors’ conviction that the BOJ will deliver some form of new stimulus next week, however, and French bank BNP Paribas issued a recommendation to sell the yen while also sounding downbeat on the euro’s near-term prospects.

“We now expect the euro to trade down to $1.07 (£0.81) by the end of the third quarter, while we expect the dollar to reach 111 yen, with Fed hikes contrasting with ECB and BOJ easing to drive USD gains,” the bank’s London-based FX strategy team said in a note.

“This (yen) trade should benefit from three key events: BOJ easing, Japanese fiscal easing and a September Fed rate hike.”