USD/JPY: yield spreads remain a persistent headwind for JPY - Scotiabank

Analysts at Scotiabank explained that JPY is quietly consolidating just above Friday’s two month low, trading flat vs. the USD while underperforming all of the G10 currencies with the exception of NZD. 

Key Quotes:

"Local markets were closed on Monday."

"Domestic risk is elevated as market participants look to the release of Wednesday’s trade and Thursday’s BoJ policy decision ahead of Friday’s CPI."

"Widening yield spreads remain a persistent headwind for JPY and continue to dominate in the context of ongoing trade policy uncertainty."