Stephen Innes, senior trader at OANDA, wrote:
With risk heebie-jebbies setting in, the USDJPY finds itself straddling the 104 level in early APAC trade, a very critical sentiment level. Markets are scrambling for election hedge, JPY “ Vols” are getting paid up, so downside USDJPY remains very much exposed.
On the Bank of Japan front, there was little new from the central bank’s policy statement, but much discussion continues to revolve around their yield curve control policy. In itself, the plan appears to be ineffective at depressing the Yen as the markets view the September policy shift as effectively tapering.