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Talking Points:

• Both the ECB (11:45 GMT) and BoJ (usually between 1:00-2:30 GMT) are due to update on their policy standings Thursday

• The Japanese central bank has greater penchant for surprises, but its European counterpart has been more active

• As the two most dovish banks amongst the major policy makers, the implications of their course is a global matter

See the DailyFX Analysts' 2Q forecasts for the Euro, Dollar, Pound, Equities and Gold on the DailyFX Trading Guides page.

The two most dovish of the world's largest central banks are due to deliberate on monetary policy today. What's more, they have both shown evidence of very early change in bearing and tempo. Policy as it shifts from the most dovish end of the curve can have far reaching fundamental implications for more than just the Euro and Yen. Therefore, traders in all regions and markets should account for this critical event risk mix. First up on the docket Thursday will be the Bank of Japan's (BoJ) policy account. This central bank has unquestioningly maintained an extraordinarily dovish policy bearing. Its open-ended stimulus program is the benchmark for easing. That said, the effectiveness of its effort has arguably diminished as its shock-and-awe qualities have evaporated to leave lackluster economic results behind.

While the BoJ has shown little appetite to change from dovish to hawkish anytime soon, we have already seen the early signs of a neutral policy shift. A transition from set infusions of stimulus into the Japanese economy to a target on the 10-year JGB (Japanese Government Bond) yield illustrates a first stage grounding. And, where language from the group and most officials remains squarely committed to the current policy mix; the bank has a history of surprising the financial markets. The QE expansion of 2015, the migration in to more asset classes up for grabs and the JGB target were all generally unexpected. This creates a skew in potential for the Yen crosses and Japanese assets. A dovish BoJ meets a diminished expectation of effectiveness and thereby reserved market reaction. Alternatively, a surprise hawkish lead can readily catch the market off balance with a remarkable move resulting. The same skew will exist in the more nuanced elements behind forecasting.

Like the BoJ, the ECB has neither been shy about the scale of easing and has seen the returns on its efforts diminish with scale. Unlike its Japanese peer, the European authority is far more communicative about its plans. The market's moved in anticipation of the 2015 implementation of QE. They also moved last month when the central bank let leak that some of its members had discussed the possibility of rate hikes even before the QE program was finished (in December). This was almost certainly a strategy decision to gauge the market's response to such a move in the future. After a restrained response to the suggestion, they may be more bold as to lay out official strategy. For the Euro, the probabilities - though not explicit - will be more substantial. Given the EUR/USD's and crosses leveling out as well as recent jumps higher could signal a more responsive market for volatility and even trend. We discuss the implications and trade potential of these important events in today's Strategy Video.