Following a relatively positive start of trading in Tokyo, which saw USD/JPY edge higher towards 110.50, renewed selling pressure in the Nikkei 225, now down by 0.35%, has seen buying flows returning into the Japanese Yen. Inter-market analysis: Yen intrinsic value higher The SP500 futures, are trading +0.3%, although well off highs, with the 30-year US Treasury yield still remaining at depressed levels after the wave of risk aversion hitting the market on Tuesday. Copper, seen as a genuine barometer of supply/demand, is trading under a consolidation phase at present. Readers should be reminded that after having touched the 110.00 level, BBJ will certainly be watching USD/JPY carefully and if moves turn too volatile, expect direct intervention or some sort of rates checking to Yen dealers, which may lead to a quick pop. Fundamental factors favour Yen strength Ashraf Laidi, Founder at ashraflaidi.com, sees many fundamental factors for further decline in the pair: "From lack of sufficient JGBs, to falling oil to structural obstacles to effective salary hikes in Japan. As for the billions of yen in foreign-bound Japanese outflows, many of these are hedged against yen strength. Meanwhile, Japan's swelling debt is offset by its current account surplus, which continues to command the order of risk-aversion flows." For more information, read our latest forex news.