USD/JPY remains vulnerable to elevated uncertainty - Scotiabank

While we have seen a turnaround in risk today, analysts at Scotiabank explained earlier that JPY remains vulnerable to strength in an environment of elevated uncertainty ahead of Thursday’s major risk events.

Key Quotes:

"Measures of implied JPY volatility are gently climbing, and risk reversals are suggestive of a rise in the premium for protection against JPY strength."

"We note the importance of resistance around 110 at the midpoint of the rally from early November. Near-term support is limited ahead of the April low at 108.13."