USD/JPY bearish below 112.80 short term - Scotiabank

Analysts at Scotiabank explained that JPY is outperforming all of the G10 currencies along with CHF and SEK.

Key Quotes:

"Market participants have ignored the release of weaker than expected industrial production data, and near-term risk appears centered on the broader tone amid month-end flows (expected to be JPY-supportive) and positioning into President Trump’s 9pm ET speech."

"JPY’s risk profile leaves it vulnerable to knee-jerk, haven-driven gains in periods of risk aversion and short-term risk reversals are pricing a minimal premium for protection against JPY strength."

"USDJPY short-term technicals: neutral-bearish—USD/JPY is hovering just above its 100 day MA (111.91) and the February 7multi month low at 111.63. Signals are bearish with a sub-50 RSI and confirmation from both the DMI’s and the short-term MA’s."

"The swift late 2016 rally provides for little in terms of support ahead of the 200 day MA at 107.71. Resistance is expected in the 112.80-113 area."