Yen Index Far From Overbought

Although USD/JPY hit a 3-month low at 110.96, reaching its 100-WEEK MA for the 1st time in 3 months and its 200-DAY MA for the 1st time in 4 months, YEN strength is far from excessive. 1. Positioning. As the CFTC’s speculative data on JPY positioning vs USD suggests, JPY remains net short vs USD, but has broken a 6-month trend line resistance, suggesting further reduction in JPY shorts.

2. JPY Trade-Weighted Index from the Bank of Japan is a truer reflection of yen value, rather than USD/JPY, which is starting to reflect reduced USD positioning. JPY TWI chart indicates upside breakout ahead (technicals) and 110 is the obligatory next stop until the next risk-relief rally. After 1 failed attempted, our Premium short in USD/JPY opened at 112.70 is nearing the target. Careful near 110.70 for now.

JPY Speculative Net Longs Vs USD

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