USD/JPY: heading higher as marlet tone improves - Scotiabank

JPY is weak from Friday’s close and extending the retracement of its haven-driven rally from early October. 

Key Quotes:

"The market tone appears to be improving and short-term yield spreads have climbed to fresh highs."

"The 2Y U.S.-Japan spread has extended beyond 300bpts to reach levels last seen in late 2007 and risk reversals are showing a clear moderation in the premium for protection against JPY strength vs. both the USD and EUR."

"There are no major domestic risk events or releases this week."