The Japanese Yen (JPY) is strong, up 0.3% vs. the US Dollar (USD) and outperforming all of the G10 currencies with the exception of NOK and NZD, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD/JPY slides as officials talk tough

"The focus for the yen remains centered on the risk of intervention following a second public pronouncement from the Ministry of Finance, with comments from Minister Katayama threatening ‘bold action’. The comments follow the MoF’s initial verbal intervention earlier in the week from the typical point person, the Vice Minister for International Affairs."

"Japanese officials looked to have drawn their initial lines at 159 and now appear to be targeting a reversal, perhaps seeking to push USD/JPY back into its prior 154.50/158 range. Domestic releases have been limited however the government bond market looks to have resumed its selloff, as we note fresh highs in the 2Y JGB yield above 1.20% as the 10Y threatens fresh highs above 2.20%."