The US president, Trump, is clearly too busy to be an avid observer of the BOJ. Their comments that Japan and China are putting the US at an unfair disadvantage when weakening their coins suggest that the fact that the intervention rounds implemented by the MOF since 2022 have been destined to strengthen the JPY, Jane Foley, FX analyst of Rabobank, may have overlooked.
Low risk will persist until the end of the year
“That said, Trump has a point because the JPY is undervalued in front of the USD, and in fact in front of most of the other G10 currencies, in many measures. In recent years they saw great interest in the jpy carry trader as the differences in interest rates were expanded, which led the speculators to short positions in JPY in front of the USD. However, this has been changing. The only central bank of the G10 that maintains a tightening policy bias and, in reflection of this, the JPY is the best performance G10 currency so far this year. “
“Recently, a Round of Japanese economic data better than expected has promoted the opinion that those responsible for the Boj’s policy are preparing the land for another rise in rates, potentially around the middle of the year. This has fed interest in the JPY. The problem, however, is that this Trade has become attended. In a strong reversal of the short net positions in JPY last year CFTC speculators suggest that the level of long net positions in JPY has reached the highest level in history. “
“In these circumstances, a benefit take -up round would not be surprising while the market awaits a new incentive to renew its long positions in JPY. The jpy’s rebound stopped in recent sessions. However, it seems that Trump’s comments have provided the incentive to renew the interest in long positions in JPY. We maintain an end of the end of the year of USD/JPY 145 The Low. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
