USD/JPY: sentiment and flows remain dominant as JPY - Scotiabank
|Analysts at Scotiabank explained that comestic industrial production figures were stronger than expected and comments from BoJ Gov. Kuroda and Dep. Gov. Iwata have reinforced a determination to ‘persistently continue easing’ in order to reach the 2% inflation target.
Key Quotes:
"The pace of BoJ JGB purchases has been increased for the first time since July.
Sentiment and flows remain dominant as JPY continues to trade well above levels implied by interest rate differentials.
The recent bullish turn in risk reversals is showing signs of a turn as we note the moderation in the premium for protection against near-term JPY strength."
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