Yen positioning reports suggest consolidation phase may soon end

Some interesting reports coming out of the interbank market suggest that overall Yen short-positioning has been reduced by more than 60% over the last few weeks. This backs up the reports of heavy USD/JPY and EUR/JPY selling by some of the big hedge funds.

The market is still short of Yen, but at very reasonable levels, and a small percentage of the market has even turned long. This will give the Yen bears some heart that the downtrend will soon begin again.

I’m still short of EUR/JPY but will re-assess if we break back above 122.75. I am still hopeful of a test back towards 117.25 and these are my main levels for the week.