TD Research discusses USD/JPY tactical outlook and maintains a bearish bias noticing that prices are now within striking distance of the flash-crash lows around 104.90.

"Risk markets are heading south again, reflecting a mix of skittish sentiment and a re-calibration of positioning. One of the major concerns now lies in the fact that global equity positioning runs at multi-year highs as global growth concerns linger. The rise in geopolitical stress and elevated uncertainty jeopardizes the muddle along scenario, especially if China tries to export deflation. The result has been a surge in demand for perceived safe-havens like gold, JPY, and CHF. The market cap of global negative yielding debt jumped to $15.5 trillion, rising roughly 80% oya. USDJPY has collapsed in kind and now looks within striking distance of the flash-crash lows around 104.90. The USD benefits too," TD adds.