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Dec 20 - 04:55 AM

USD/JPY - COMMENT-USD/JPY Bears On The Prowl For 125 After BoJ Shock

By Rob Howard  —  Dec 20 - 04:25 AM

Dec 20 (Reuters) - USD/JPY bears hope there is more than enough honey left in the FX pot to deflate the rate to 125, following Tuesday's hawkish surprise from the Bank of Japan.

USD/JPY, which was above 137 into the unexpected widening of the 10-year JGB yield trading band to 50 basis points by the BoJ, was last at 125 in April (125 approximates to the March high).

The shock move by the BoJ sent the yen soaring and depressed USD/JPY to an EBS low of 132.06 - its lowest since August, and nearly 20 big figures below October's 22-year high.

Yen short positions have been squeezed during the slide to 132.06, but more likely remain - and if they are ditched it could help juice USD/JPY to 125.

CFTC data last week showed the net JPY short position held by IMM speculators was 53,188 contracts in the week ended Dec.
13 (IMM speculators have been net JPY short since March 2021).

For more click on FXBUZ


Source:
Refinitiv IFR Research/Market Commentary

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