FXStreet (Guatemala) – Analysts at Scotiabank explained that JPY has touched a fresh one-year high, breaching the short-lived intraday lows from August to reach levels last seen in January 2015.
Key Quotes:
“The broader market tone is in focus, with haven-driven JPY gains resulting from renewed risk aversion. However, JPY appears increasingly vulnerable as we consider headline risk hinting to Japanese officials ‘closely monitoring currency markets’.
The dominance of sentiment is underscored by USD/JPY’s tight correlation with risk reversals. However we acknowledge the YTD 25bpt narrowing in the 2Y U.S.-Japan yield spread suggesting a fundamental erosion in support for USD/JPY.
(Market News Provided by FXstreet)