Yen feeling pressures with previous 118 score – Scotiabank

By FXStreet FXStreet (Guatemala) – Despite the pullback to 117.55 the low, prior to the supply in USD/JPY, analysts at Scotiabank explained that JPY was underperforming, pressured by a moderation in risk aversion that is providing for an unwind of JPY’s recent safe-haven gains.

Key Quotes:

“USD/JPY rallied back above 118.00 toward Friday’s open, with upside risk as we consider the potential for a reversal of the swift YTD decline from the December 31 close around 120.20.

Fundamentals are bullish for USD/JPY as we look to levels implied by yield spreads (U.S.-Japan 2Y) and measures of sentiment are showing signs of a turn as we note the shift in risk reversals hinting to a moderation in demand for protection against downside risk (JPY gains).”
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Source:: FX Street