Reuters: The Attraction and Risks of Yen Trading Are Rising
Reuters, July 2 report, global investors are reducing their bets on the rapid appreciation of the yen, as the Bank of Japan's cautious stance, trade war risks, and high holding costs have put pressure on this popular trade. Although most analysts still favor the long-term outlook for the yen, short-term resistance has cooled market sentiment. Data shows that investors currently hold a net long position of 11.41 billion yen, significantly down from 15.7 billion yen in mid-April. James Arthur, a fixed income manager at Marquette, said that the Bank of Japan's "inflexibility" and short-term position pressure are the main adverse factors, but the long-term positive factors remain unchanged. The interest rate gap between the United States and Japan makes holding the yen costly, and if the yen depreciates, investors will face a double blow. Bo Zhuang, a macro strategist at Loomis Sayles, pointed out that investors originally expected the yen trade to take effect within 3 to 6 months, but now the holding cost may exceed the returns. In the derivatives market, the demand for yen call options has increased, indicating that some investors still expect a rebound. Moh Siong Sim, an FX strategist at Singapore Bank, believes that the yen's movement will depend on the progress of US-Japan trade negotiations, while policy uncertainty is causing market sentiment to fluctuate repeatedly.
Original: https://www.toutiao.com/article/1836600167403584/
Statement: This article represents the views of the author himself.