USD/JPY: vulnerable to broader developments - Scotiabank

Analysts at Scotiabank noted that the JPY is strong, a mid-performer among the G10 in an environment of broad-based USD weakness.

Key Quotes:

"Yield spreads are narrowing in a JPY-supportive manner, and short-term measures of implied JPY volatility are climbing to drive a rise in the premium for protection against JPY strength.

The absence of domestic data should leave JPY vulnerable to broader developments through the remainder of the week, with considerable risk into Friday’s U.S. inauguration."