USD/JPY: narrowing rate differentials are yen supportive - Scotiabank

Analysts at Scotiabank noted the performance in the yen.

Key Quotes:

"Narrowing interest rate differentials are offering support and the 10Y U.S.-Japan yield spread is threatening 275bpts at levels last observed at the height of Italy’s turmoil from late May. 

Speculative JPY bears remain vulnerable as Friday’s CFTC data revealed a fourth consecutive week of short covering. Near-term domestic risk is limited ahead of Friday’s CPI release."