USD/JPY: more room to the downside yet - Scotiabank

Analysts at Scotiabank noted that JPY is outperforming with a 1.3% gain, rising in tandem with gold in an environment of elevated uncertainty. 

Key Quotes:

"USD/JPY has fallen to fresh lows reaching levels last seen in October 2014, fully fading the gains driven by the BoJ’s October 31 (2014) surprise expansion in QQE."

"Japan’s Chief Cabinet Secretary Suga has once again delivered public commentary on JPY, repeating his call for ‘vigilance’ as he noted the ‘one-sided moves in FX markets’."

"The evolution in rhetoric would suggest concern about ‘disorderly movements’ that were mentioned the G7 statement from February 2013. G7 finance ministers and central bank governors are ‘to consult closely on exchange markets and cooperate as appropriate’."

"We do not anticipate intervention at the current time, given that the decline in USD/JPY has shown few signs of dislocation."