USD/JPY: the broader tone remains tentative - Scotiabank

Analysts at Scotiabank explained that JPY is strong, outperforming all of the G10 currencies in the context of mild risk aversion following U.S. President Trump’s overnight comments on the topic of the border wall with threats of a government shutdown and NAFTA termination. 

Key Quotes:

"Spreads remain steady and supportive for JPY at the lower end of their recent range. Risk reversals are pricing a slight premium for protection against JPY strength.

We continue to highlight JPY’s vulnerability to knee-jerk, haven-driven gains as a result of its risk profile as the broader tone remains tentative into Friday’s Jackson Hole risk."