The latest IMM data covers the week from 11 November to 18 November 2014 .
IMM data released on Friday revealed the largest single week bearish JPY build since September, sending speculative positioning to the 15th percentile (see page 4). The move reflects the previous week's regained momentum in JPY selling (see page 11) and Prime Minister Shinzu Abe postponing the planned consumption tax hike of October 2015. While Abe's decision arguably weakens the strong anchor for the Bank of Japan's aggressive monetary policy, we still expect relative monetary policy and portfolio flows to be significant supportive factors for USD/JPY going forward. In addition, while positioning is stretched and technical indicators suggest the pair is overbought, history has shown that the cross can be very persistent under appreciation trends. We target the cross at 120 in 3M, 122 in 6M and 124 in 12M.
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