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Analysts at Scotiabank explained that JPY is underperforming all of the G10 currencies in an environment of mild risk appetite and broad-based USD weakness.

Key Quotes:

“The broader tone remains dominant and JPY appears to have softened modestly in response to the release of softer than expected industrial production data.”

“Yield spreads are extending their recent reversal, widening modestly in a JPY-negative manner.”

“Risk reversals are also showing signs of a turn, softening from relatively extended levels””though still pricing a sizeable premium for protection against JPY strength.”

“For USDJPY, we await a clear break of 109.00 and note the absence of any significant resistance ahead of the 200 day MA at 110.20. Near-term EURJPY resistance appears limited ahead of 129.20.”