The Japanese Yen (JPY) is weak, down 0.4% against the US Dollar (USD) and trading heavily in an environment of trade policy uncertainty, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Markets await for CPI next week

"Sentiment is dominating, as we note the continued stability in yield spreads that should provide the yen with some fundamental rate support. Next week’s release calendar is critical, and we specifically highlight Friday’s CPI as an important input to BoJ policymakers’ deliberations into the July 31 meeting."

"A hold is widely expected but recent comments have hinted to the possibility of upward revisions to the central bank’s inflation forecast. We continue to highlight the neutral short-term technical outlook for USD/JPY with support at 142.50 and resistance above 148.00."