JPY soft and trading defensively – Scotiabank

The Japanese Yen (JPY) is soft, down 0.2% against the US Dollar (USD) but trading defensively and hitting fresh local lows as we head into Thursday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Breaking local range to hit fresh lows

"Spreads are largely unchanged following Wednesday’s Fed, and this week’s BoJ/Fed events have offered little to those looking for a change in the outlook for relative central bank policy. We remain bullish JPY on the back of a hawkishly biased-BoJ and see the Fed’s current neutrality as a prelude to medium-term easing."

"We maintain a year-end USDJPY target of 135 and have a 2026 year-end target of 125. Near-term JPY risk lies with the release of national CPI data at 7:30pm ET."