USD/JPY: broader tone appears set to dominate - Scotiabank

Analysts at Scotiabank explained that JPY is quiet, making a marginal October high vs. the USD while outperforming most of the G10 currencies.

Key Quotes:

"The broader tone appears set to dominate as we highlight the continued importance of the 10Y U.S.-Japan spread. Short-term risk reversals capturing the October 22nd election are showing a sizeable premium for protection against JPY strength."

"Friday’s CFTC data showed a third consecutive week of building gross shorts. These newly established positions appear vulnerable in the context of JPY’s recent gains."