USD/JPY: bid in Tokyo help recover opening gap through 101.50

USD/JPY is up through the mid-way point of the 101 handle in a good recovery from the opening gap fuelled by a drop in Sterling after PM May's comments on Brexit.

USD/JPY is susceptible to the offer in safe haven flows flooding the yen and Brexit is coming back into focus with the recent comments from over the weekend in the UK that Brexit will be administered with article 50 being triggered at the end of March. However, while this alleviates some uncertainty, it does so only marginally as there are still many risks that face the UK economy on such an event. 

USD/JPY levels

Meanwhile, the dollar was resilient to the test below 100.00 and remains in a reversal of the late September from just below the 103 handle.  "However, the upside may be blocked near JPY102.00. A trendline connecting the September highs comes in just below there at the start of next week and corresponds to the 50-day moving average," explained analysts at Brown Brothers Harriman. "Of note, the dollar-yen rates appears to have become decoupled from the stock market. The rolling 60-day correlation between dollar-yen and the S&P 500 has fallen to 0.1, the lowest since the middle of 2015."