USD/JPY: expectations for policy normalization pushed back - Scotiabank

Analysts at Scotiabank explained that the JPY had been weak, underperforming and extending Monday’s bearish reversal. 

Key Quotes:

"The outlook for relative central bank policy is dominating into Wednesday’s Fed and comments from BoJ Dep. Gov. Amamiya have pushed back on expectations for policy normalization and underscored the need to maintain an exceptionally accommodative stance."

"Risk reversals are shifting and hint to a clear moderation in the premium for protection against JPY strength vs. both the USD and EUR."