USD/JPY Hits 3 Weeks Low As Speculators Wind Down Bullish Positions

The yen touched the strongest in three weeks after bearish bets slid to a six-week low and as investors weigh the outlook for a reduction in Federal Reserve monetary stimulus before policy makers speak this week.

The Bloomberg Dollar Spot Index dropped on Jan. 10 by the most in almost three months after a U.S. government report showed jobs rose less than the most pessimistic projection in a Bloomberg News survey. Japan’s currency rose against the euro, adding to a two-week advance, before data economists say will show Italian industrial output growth slowed. Australia’s dollar touched a one-month high against the greenback after home-loan growth exceeded expectations.

“We do look for consolidation below 105 in the first quarter before it marches higher,” said Sacha Tihanyi, a Hong Kong-based strategist at Scotiabank, referring to the dollar-yen rate. “A lot of it is going to be positioning-driven.”


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu