Research Team at BBH, suggests that the yen tends to respond to market developments in an asymmetrical fashion. Key Quotes “The earlier gains in equities and US yields did not exert much downside pressure on the yen. However, the weakness in share prices and the pullback in US yields have given the yen a bid. The dollar eased to JPY111.65, slipping marginally below the low on February 12. This brings the February 11 low (just below JPY111.00) into view. We have suggested initial scope toward JPY110.50 and recognize the psychological significance of JPY110. We remain impressed by the low level of verbal intervention by Japanese officials and the absence of material intervention. On a trade-weighted basis, the yen has appreciated by about 7.5% this month, which is a substantial shock. It is tantamount to some degree of tightening, and when coupled with the 10.3% drop in the Topix, it is even greater. It would seem to add pressure on the BOJ to cut rates further as early as next month.” For more information, read our latest forex news.