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USDJPY –A substantial Japanese Yen breakdown (USDJPY, xxx/JPY breakout) has been met with aggressive crowd buying. Until this changes we’ll continue to call for further JPY weakness.
Trade Implications – JPY Pairs:Our retail trader sample shows that a relatively modest 53 percent of open positions are short USDJPY, but total short interest has gained 12 percent since last week while long positions are up a lesser 11 percent. We would typically wait for more one-sided positioning before taking an aggressive stance. Yet we see little choice but to favor further Yen weakness amid such clear momentum and hyper-aggressive monetary policy from the Bank of Japan.
See next currency section:AUDUSD – Australian Dollar Remains a Sell
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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