USD/JPY: Modest gains as MoF warnings cap upside – Scotiabank

Scotiabank analysts Shaun Osborne and Eric Theoret note that USD/JPY is up modestly, with the Japanese Yen soft versus the US Dollar but outperforming most G10 currencies except the Canadian Dollar. The currency is drawing some haven support and appears underpinned by verbal intervention from Japan’s Ministry of Finance. The latest USD/JPY advance has cleared early February election highs, leaving little resistance before the mid‑159s.

Yen steadies on haven flows and MoF rhetoric

"The yen is soft, down a modest 0.3% vs. the USD while performing relatively well against all of the G10 currencies with the exception of the CAD."

"The yen’s relative gains are important, reflecting (some) lingering haven-related strength despite the recent shift in the currency’s relationship to risk more broadly."

"The yen’s relative performance also likely reflects verbal intervention from Japan’s Minister of Finance Katayama who stated that the gov’t was ‘monitoring’ financial markets with ‘utmost vigilance’, language that is typically used as a warning to markets in order to mitigate disorderly conditions with the threat of central bank action."

"For USDJPY, the latest gains have broken the early Feb election highs, offering nothing ahead of local range high in the mid 159s."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)