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4 May 2016
USD/JPY: the broad shift in in the USD - Scotiabank
Analysts at Scotiabank explained that Japan’s local holiday has left JPY vulnerable to whipsaw movement and a series of erratic Asian session swings hints to the potential for a shift in its vulnerability from knee-jerk JPY strength (USD/JPY drops) to knee-jerk JPY weakness (USD/JPY spikes).
Key Quotes:
"Note that Japan’s domestic holiday continues through Thursday. JPY’s risk profile typically provides for haven-driven gains in periods of such as these however the broad-shift in the USD appears dominant and is likely to remain so.
Measures of sentiment hint to a stabilization in demand for protection against JPY strength (USD/JPY downside), and we note that bullish net long JPY positioning remains close to near-record record levels, leaving JPY vulnerable to an adjustment in the event of a sustained turn in its near-term path."
Key Quotes:
"Note that Japan’s domestic holiday continues through Thursday. JPY’s risk profile typically provides for haven-driven gains in periods of such as these however the broad-shift in the USD appears dominant and is likely to remain so.
Measures of sentiment hint to a stabilization in demand for protection against JPY strength (USD/JPY downside), and we note that bullish net long JPY positioning remains close to near-record record levels, leaving JPY vulnerable to an adjustment in the event of a sustained turn in its near-term path."