Yen may weaken again – SocGen

CFTC data show Yen shorts cut back, but not eliminated. Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes JPY outlook ahead of the Bank of Japan (BoJ) meeting. 

Short EUR/JPY for the BoJ? 

The Yen has been supported by a very sharp unwind of longs, according to CFTC data, but overall positioning remains short. 

The BoJ meeting on Tuesday probably won’t do anything, and that may see the Yen weaken again, especially if Treasuries sell off when the US comes in. The Yen though, is helped by the fact that a sharp cut in shorts still leaves the market short, unlike the Euro position. Maybe the best way forward remains being short EUR/JPY.