JPY softens amid quiet market conditions – Scotiabank
The Japanese Yen (JPY) is slightly weaker against the US Dollar (USD), underperforming its G10 peers as markets await PPI data.

The Japanese Yen (JPY) is slightly weaker against the US Dollar (USD), underperforming its G10 peers as markets await PPI data. Technical indicators suggest USD/JPY may moderate from recent overbought levels, with 155 acting as key near-term support, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD/JPY eases from overbought technicals

"The JPY is soft, down a fractional 0.1% vs. the USD while underperforming all of the G10 currencies in overall quiet trade. Fundamental releases have been limited and near-term risk lies with the release of PPI data at 6:50pm ET."

"Yield spreads are steady at their recent (JPY-supportive) lows and risk reversals also appear to have flattened out at levels that are pricing a remarkably small premium for protection against JPY strength."

"USD/JPY technicals have softened from bullish, overbought levels and are suggestive of a moderation toward more neutral readings. We continue to highlight the importance of the 155 level for near-term support."


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