Japan’s retail investors are cutting bets on a weaker yen, especially against Europe’s major currencies, amid an expectation the country’s central bank will inevitably normalize its ultra-loose policy.
(Bloomberg) — Japan’s retail investors are cutting bets on a weaker yen, especially against Europe’s major currencies, amid an expectation the country’s central bank will inevitably normalize its ultra-loose policy.
Individual investors cut long euro-yen positions to the lowest since June 2021, while long pound bets against the Japanese currency fell to the lowest since 2020, according to data from Tokyo Financial Exchange Inc.’s Click 365. Yen shorts against the dollar fell to the lowest in a month.
“A growing number of individuals see the yen rising on speculation of policy normalization by the new BOJ governor,” said Tetsuya Yamaguchi, chief technical analyst at Fujitomi Securities Co. Retail investors might also expect the Federal Reserve to pause rate hikes which could encourage other central banks to follow suit, he added.
While Bank of Japan Governor Kazuo Ueda hinted that any significant policy tweak may be unlikely for the time being, in his inaugural press conference Monday, market participants still see a policy shift as inevitable in the face of rising inflation.
Ueda’s Dovish Stance Looks Unsustainable as Price Pressures Bite
The yen has fallen over 3% against the euro this year and more than 4% against the pound.
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