Eric Theoret, CFA, CMT FX Strategist at Scotiabank, explained that sentiment continues to provide for the bulk of movement in JPY as we consider its ongoing divergence to typical fundamental drivers such as yield spreads. Key Quotes: "The 2Y U.S.-Japan yield spread currently implies a level of USD/JPY closer to 122.00. As such, risk reversals are key to watch as we consider the near term path for USD/JPY. The one week measure has staged an impressive rally off its early February lows, suggesting a moderation in demand for protection against downside movement in USD/JPY (JPY strength). Similar shifts have been observed in the one month and one year measures as well." For more information, read our latest forex news.