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Analysts at Scotiabank explained that the broader tone remains dominant and the near-term balance of risk appears set to favor JPY weakness as we look to an unwind of its recent safe-haven gains.  

Key Quotes:

“Yield spreads are once again widening in a JPY-bearish manner and risk reversals appear somewhat extended pricing a sizeable premium for protection against JPY strength.”

“EURJPY has bounced off of support just below 125 and the USDJPY candles have ‘hammered’ a closing low.”

“Domestically, retail sales data were stronger than expected and their release appeared to coincide with the early Asian session turn in JPY.”

“Japan releases industrial production data at 7:50pm ET.”