USD/JPY intermarket: Equiities toppy and Yen looking cheap?

USD/JPY is a no show on the open in Tokyo with equities subdued following the poor performance on Wall street overnight.

The question now is whether the risk on mood is shifting, Yen positive and whether we have seen the highs in USD/JPY for the time being?  USD/JPY has failed at 105.00 after all and that has been a historically psychological barrier over the last couple of years within the ranges of ranges that the Yen has played out vs the greenback. 

Yields in USD/JPY are paring back after the massive divergence seen at the end of last week and open in Asia this week, but the market seems to be acknowledging the likelihood that the Fed may not raise rates after all this year, despite the recent upside surprise in the nonfarm payrolls data last week. The Fed funds rate is now at 153.64, down from 1.54.50 last week and stabilizing, potentially heading lower and it is certainly much lower than the start of the year's highs of 162.70.  But back to equities, we are ina bubble and Wall Street is at all time highs. A change in sentiment and direction in bonds, with markets fully pricing out a Fed hike, could see a return to flight of safety and that could would lead the yen a lot higher again.