Yen: below last week’s highs at the upper end of its multi-month range - Scotiabank

Analysts at Scotiabank explained that the JPY below last week’s highs at the upper end of its multi-month range. 

Key Quotes:

"Softer labour cash earnings data provided for modest JPY strength that was slowly eroded through the latter half of the Asian trading session."

"Domestic risk should remain elevated into Wednesday’s current account and Thursday’s machine orders figures. The 2Y U.S.-Japan yield spread has narrowed in a JPY-positive manner, pushing back toward 140bpts through the mid-point of its range from mid-December."

"Measures of sentiment remain supportive, with Friday’s CFTC data showing a fifth consecutive week of narrowing in the net short JPY position."

"Options markets are also delivering support to JPY with a notable decline in measures of implied volatility and softening in the premium for protection against JPY strength."