MUFG Research flags a scope for further JPY weakness over the near-term.

"Developments earlier this week you would have thought were supportive of continued yen strength. US yields fell notably with the 10-year UST bond yield dropping 10bps to trade below 1.00% yesterday in part on increased equity market volatility and dovish communications from Fed Chair Powell on Wednesday– but USD/JPY held firm and is now higher as US yields rise in response to equity market gains and the recovery in risk appetite,' MUFG notes. 

"We have been running a short EUR/JPY trade idea but have closed this given the limited JPY strength this week. We see a number of factors that may extend further this spell of JPY weakness over the short-term," MUFG adds.