USDJPY: Stabilization in technical tone? - BBH

The dollar's recovery against the yen since hitting JPY107.30 in early September coincided with the recovery in the US 10-year premium over Japan from 203 bp to almost 240 bp by late October, explains the research team at BBH. 

Key Quotes

“This month the premium has stopped trending higher and moved sideways between 227 bp and 235 bp.  This has coincided with a pullback in the greenback against the yen.  The dollar peaked near JPY114.75 in the first week of November and slumped to nearly JPY111.00 last week.  The lows corresponded with a 50% retracement of that dollar's recovery.  A break would open the door to the next retracement objective near JPY110.15.  A move back above previous support in the JPY111.65-JPY111.80 would help stabilize the technical tone.”