Japanese Yen: Retail flows reshape post-intervention dynamics – MUFG
MUFG notes that USD/JPY remains well below pre-intervention levels. Japanese retail traders entered the episode with a record short position in the pair and likely covered those positions during the intervention-led decline, partially offsetting official yen purchases.
MUFG observes that USD/JPY stays far below intervention levels, with retail traders in Japan entering the market with a record short position. They likely covered these positions during the intervention, partially countering official yen purchases. USD/JPY is presently around 6 figures below its pre-intervention level, having rebounded two figures from the Monday intra-day low.
Without the Monday intervention, the impact would have been more significant than any other intervention in 2022, 2024, or the April/May episode. The OTC FX margin retail positioning data for June indicated a shift from yen shorts to long positions, with the USD/JPY short position hitting a record total of USD 17.65bn. This suggests that Japanese retail traders acted swiftly as buyers following the intervention, helping to mitigate some of the MoF's record yen-buying intervention effects.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
