Technical Analysis of JPY/USD Market Positioning

Large speculators flipped to net-long exposure yen futures for the first time in six weeks. This change in sentiment is not surprising given the recent increase in long bets and decrease in shorts over the past four weeks.

Bullish exposure to JPY is certainly not extreme at just 2.4k contracts. However, with odds of a BOJ hike rising and asset managers net-short by just 5.8k contracts, we could be looking at a stronger yen as we head into the new year.

Factors to Consider

Rising odds of a BOJ hike
Asset managers are net-short by just 5.8k contracts
Turbulence during Trump's second term may provide support for the yen

Conclusion

The technical analysis of JPY/USD market positioning suggests that the yen could strengthen in the coming months. This is due to a combination of factors, including rising odds of a BOJ hike, net-short positioning among asset managers, and potential turbulence during Trump's second term.

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Informational only. Not investment advice.