11 Mar 2016
USD/JPY is awaiting Central Banks - Scotiabank
Analysts at Scotiabank explained that JPY is weak, underperforming along with EUR and gold in an environment of broad-based risk appetite.
Key Quotes:
"Sentiment remains the primary driver for JPY as we note a tight correlation to longer term (1Y) risk reversals and remarkable disconnect to the 2Y yield spread—at 110bpts implying a USD/JPY level in the 122-124 range.
Near-term risk is limited ahead of next week’s Fed and BoJ policy decisions."
Key Quotes:
"Sentiment remains the primary driver for JPY as we note a tight correlation to longer term (1Y) risk reversals and remarkable disconnect to the 2Y yield spread—at 110bpts implying a USD/JPY level in the 122-124 range.
Near-term risk is limited ahead of next week’s Fed and BoJ policy decisions."