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May 01 - 01:24 AM
USD/JPY: Upside Risks Post-Golden Week Holidays On Retail Investors' Position Unwinds - NAB
First appeared on eFXplus on Apr 30 - 04:15 PM

NAB Research discusses USD/JPY tactical outlook and flags a scope for upside after the end of the Golden Week holidays in Japan.

"We noted that Japanese retail FX traders were running extended net long TRY/JPY (and ZAR/JPY) positions into the start of Golden Week - a 6-day holiday period during which the TFE, Gaitame.com and other margin trading exchanges will remain open. This is seen to entail some risk of a repeat of the January 3rd JPY-related ‘flash crashes’ in the event we see violent moves in TRY (or ZAR) this week. But maybe more pertinent is that retail investors are running record short USD/JPY positions on the TFE  - perhaps in part as a defensive strategy during Golden Week (or indeed to benefit from another flash crash event)," NAB notes.

"As such, if we are spared a stronger JPY this week, there must be a risk that position unwinds by retail investors support a stronger USD/JPY next week and beyond, at a time when the stronger USD environment in any event suggests that the risks to the prevailing ¥110.50 to ¥112.85 range lies to the upside," NAB adds, 

NAB Research/Market Commentary


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