JPY flat w/ overnight recovery mirroring spreads – Scotiabank
The Japanese Yen (JPY) is entering Wednesday’s NA session unchanged against the US Dollar (USD) with an impressive recovery from overnight losses that seemed to primarily reflect movement in the US Treasury market, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.
Overnight recovery offers stabilization
"Yield spreads appear to be rolling over and narrowing in a JPY-supportive manner, following their recent widening through a period that also included the announcement of US tariff hikes from August 1. USD/JPY continues to trade in a flat range roughly bound between 142.50 support and 148.00 resistance."
"In terms of data, we look to the PPI release scheduled for 7:50pm ET. Lastly, we note that BoJ board member Koeda has hinted to the possibility of an upward revision to the central bank’s inflation forecast at the next meeting on July 31. Recent communications have been cautiously hawkish, given bond market turbulence and trade policy uncertainty."