USD/JPY better offered fundamentally – Scotiabank

By FXStreet JPY is strengthening in an environment of broad-based USD weakness with a rise to fresh one week highs.

Key Quotes:

“Domestic industrial production data released in the Asian session detailed an unexpectedly weak print for February with the largest m/m decline since the March 2011 tsunami, however the response was obscured by the broader USD move that has dominated since Tuesday’s unexpectedly cautious speech from Fed Chair Yellen.

The 2Y yield spread has narrowed an impressive 10bpts this week, favoring JPY on the back of a decline in U.S. yields driven by the response to Yellen’s shifting tone. Risk reversals appear to be stabilizing, suggesting a potential end to the moderation in demand for downside risk that had been observed through most of March.”
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Source:: FX Street