The Japanese yen is among the day’s best performers “” a theme that could get more traction this week in the view of economists at TD Securities who think the JPY has room to recover some of its recent weakness as valuation and positioning look increasingly favourable.
See: USD/JPY to edge higher as US economy catches up with Asia – Danske Bank
Key quotes
“The JPY has room to recover some of its weakness seen over the last few weeks. The yen is starting to look increasingly cheap on our valuation dashboard. At the same time, the overhang of short-JPY positions also appears overly stretched.”
“Our focus today is on the 108.50/60 zone in USDJPY, where we have seen some support emerge in recent days. More interesting, however, will be to see how the pair behaves if we manage to push a bit lower under 108.35. This could trigger additional selling pressure and signal further downside potential to come.”
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