Yen Flow Momentum Weak Despite Net Longs Ahead of BOJ
BNY’s Geoff Yu notes that flow momentum and positioning in the yen were light ahead of the Bank of Japan’s decision, even though investors were net long, hinting at a fragile backdrop for the currency.
According to BNY’s Geoff Yu, the Japanese yen approached the latest Bank of Japan decision and suspected currency intervention with subdued flow momentum and relatively light market positioning. This came despite the fact that speculative investors continued to hold a net long position in the yen, indicating a potential divergence between positioning and actual capital flows.
The observation suggests that the rally in the yen may lack strong underlying support, raising questions about the sustainability of any short-term gains driven by official action.
Source: FXStreet Forex News