JPY is outperforming with modest gains – Scotiabank

The Japanese Yen (JPY) is up a modest 0.2% against the US Dollar (USD) and outperforming most of the G10 currencies into Monday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.

Focus on key CPI data & BoJ on July 31

"Trade tensions remain front and center as markets look to US Treasury Secretery Bessent’s upcoming visit and consider the latest comments from president Trump as he focused on the trade imbalance in autos. Fundamentally, Japan’s core machine orders came in better than expected, along with the monthly tertiary (services) industry index."

"The near-term calendar is heavy as we look to trade and national CPI figures scheduled for release later this week. The data will be an important input for BoJ policymakers as they formulate their policy decision on July 31. Media continue to report of a possible increase to the central bank’s inflation forecast."

"JGB yields are climbing and narrowing spreads in a JGB-supportive manner. The near-term balance of risk favors downside risk in USD/JPY, back toward the lower end of its 142.50-148.00 range from early April."