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    USD/JPY intermarket: price out of synch with yield spreads

    USD/JPY made fresh lows for the session, testing back down through the 104 handle and marking 103.91 the low.USD/JPY has been better offered, despite dollar weakness at the start of the week and a better risk tone across the board seen through an advance in commodities and on Wall Street. However, the polls are more or less even with a favouritism to the remain camp in respect to the EU referendum this week and that should support the Yen. However, looking to the yield spreads (181.49 time of writing USD/JPY 10Y spread), it is evident that demand is back in vogue with volatility down to the lowest levels since the 12th of this month at 16.44. The price is lagging behind the fundamentals against the backdrop of an obscure market setting given the pending EU referendum.USD/JPY: all eyes on BoJ, Yen remains vulnerable - ScotiabankUSD/JPY levelsAnalysts at Scotiabank noted that the USD/JPY short-term technicals remain bearish with momentum signals that are extended and explain that trend indicators are providing confirmation while the bearish ADX is strengthening. "We continue to highlight the absence of significant support ahead of 102 and 100. Recent USD/JPY gains appear to have found considerable resistance above 104.80."

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