USD/JPY stays supported around 112 and 111.65 – Danske Bank

Senior Analyst at Danske Bank Morten Helt noted the pair faces initial contention around the 112 handle seconded by 111.65.

Key Quotes

“USD/JPY faces increasing headwinds from the flattening of the US yield curve, and the cross trades lower this morning despite a constrictive tone on risk markets”.

“Further flattening of global yield curves is a potential game changer for USD/JPY, which has seen substantial support driven by higher global yields over the past year. Speculative accounts are very short JPY, according to the IMM, indicating an elevated downside risk in the short term. Key support levels are 112 (figure) and 111.65”.