JPY is consolidating awaiting Japanese GDP - Nomura

The JPY is quietly consolidating its recent decline and range bound just above last week’s one month low. 

Key Quotes:

"All eyes are on Japan’s upcoming (6:50pm ET) GDP release with expectations of a contraction in Q3 (-1% QoQ Ann.)."

"JGB yields are soft however U.S.-Japan spreads have narrowed on the back of this latest round of risk aversion."

"Domestic developments are expected to compete with the broader market tone and extended bearish speculative positioning leaves JPY vulnerable to adjustment."

"Risk reversals have faded a good portion of the premium for protection against JPY strength vs. both the USD and EUR, leaving ample room for a recovery."