The latest IMM data cover the week from 8 to 15 September 2015.
IMM positioning data released Friday reveal that investors significantly added bearish JPY bets last week after four weeks of considerable short-covering. The move probably reflects renewed focus on diverging monetary policy between the Fed and Bank of Japan. Fundamentally, we also see a potential for higher USD/JPY on not least a looming Fed December hike. In the very short term, however, we expect USD/JPY to range trade targeting the cross at 120 in 1M. While we, in our base case, do not expect further BoJ easing, the case for more stimulus has increased in recent months and expectations of additional BoJ easing are likely to support the cross going into the 30 October meeting. In our view, the current neutral level of speculative positions also leaves a potential for bearish JPY builds sending the cross higher. We target USD/JPY at 124 in 3M and 125 in 6M.
To Read the Entire Report Please Click on the pdf File Below.