Speculative investors’ short Japanese Yen (JPY) positions are close to a record. USDJPY could see bouts of pullbacks if US data continues to point to a soft landing, UBS FX strategists note.
Short Yen positions are close to a record
“The Japanese Yen jumped as much as 3% against the US Dollar (USD) after the US CPI print pushed the Treasury yield lower, and as Japanese officials appeared to have conducted another round of intervention with yen purchases.”
“While we only expect US-Japan yield differentials to narrow more meaningfully by year-end, we advise against chasing USD/JPY higher or taking JPY loan exposure. Given that speculative investors’ short Yen positions are close to a record, we think that USDJPY could see bouts of pullbacks if US data continues to point to a soft landing.”
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