Post-(French) election market tone to drive Yen - Scotiabank

Analysts at Scotiabank explained that the post-(French) election market tone will be the dominant driver for JPY in the absence of high-level data releases this week.

Key Quotes:

"JPY weakness appears somewhat extended relative to the levels implied by yield spreads, opening up the risk of a readjustment.

Levels of implied volatility are remarkably low, with some measures reaching levels last seen in early 2016 as risk reversals hint to a continued erosion in the premium for protection against JPY strength. 

Weekend comments from BoJ Gov. Kuroda provided no surprises."

• USD/JPY touches 113 as USD preserves strength