A rise in protection against Yen strength - Scotiabank

Analysts at Scotiabank explained that the JPY is soft following a short-lived break to a fresh cycle high driven by stronger than expected machine orders data. 

Key Quotes:

"JPY’s dominant risk continues to center on the broader market tone, however the response to fundamentals is important and could hint to early signs of a shift in drivers."

"We note the stabilization in the 2Y U.S.-Japan yield spread, consolidating around 95bpts since March 31. In terms of sentiment, JPY appears increasingly vulnerable as we note the continued rise in bullish positioning with the CFTC gross long position reaching a fresh record high. Options prices suggest a continued rise in demand for protection against JPY strength."