Yen vulnerable to adjustment, watching dollar and euro - Scotiabank

Analysts at Scotiabank explained that JPY came with an impressive fade of a near -0.7% rally observed in early Asian trade. 

Key Quotes:

"Sentiment remains dominant and the broader tone is critical as market participants assess the considerable amount of event risk on the horizon. 

One week risk reversals are already showing signs of a turn, suggesting some concern surrounding upcoming weekend events in Italy (election) and Germany (SPD vote). 

Extended bearish positioning leaves JPY vulnerable to adjustment, both vs. the USD and EUR. 

EUR/JPY has shown some signs of stabilization around its 200 day MA, and we highlight its importance as a reliable barometer for the broader market tone."