PY risk is elevated and biased to strength - Scotiabank

Analysts at Scotiabank explained that the JPY is outperforming with a 0.6% gain, rising to levels last seen in early July.

Key Quotes:

"JPY risk is elevated and biased to strength as we note the market’s muted response to the official announcement of PM Abe’s long-anticipated fiscal stimulus plan."

"The reaction follow’s last week’s post-BoJ disappointment, shifting the focus back to broader developments following a multi-week period in which domestic risk has driven much of the movement in JPY."

"Yield spreads are suggestive of further JPY strength and risk reversals hint to a rise in demand for protection against upside risk."