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Saturday, May 18, 2024

Sentiment Remains Low for Japanese Yen 4/21/2024

Key Takeaways:

  • Recent data from the Chicago Mercantile Exchange (CME) suggests that market sentiment for the Japanese Yen (JPY) remains low.
  • Over the past few months, the percentage of open interest held by asset managers and leveraged funds in short positions has consistently outweighed long positions.

USD/JPY Sentiment From CME

Recent data from the Chicago Mercantile Exchange (CME) suggests that market sentiment for the Japanese Yen (JPY) remains low. The Commodity Futures Trading Commission’s (CFTC) Commitments of Traders report, which provides a breakdown of open interest for futures and options contracts, shows a consistent trend of negative sentiment towards the JPY.

COT Sentiment Data

Over the past few months, the percentage of open interest held by asset managers and leveraged funds in short positions has consistently outweighed long positions. As of April 16, 2024, asset managers held 38.7% of total open interest in short positions, compared to just 17.6% in long positions. Similarly, leveraged funds held 42.7% of open interest in short positions and only 11.8% in long positions.

This imbalance suggests that institutional investors and speculators are betting on further weakness in the Japanese Yen. The trend has been persistent, with the percentage of open interest in short positions remaining elevated since the start of the year.

The changes in open interest figures also points to growing bearish sentiment. In the most recent week, total open interest increased by 6,631 contracts, with the bulk of this growth coming from an increase in short positions held by dealers and leveraged funds.

The low sentiment towards the Japanese Yen can be due to different reasons, this could be due to the carry trade still existing even though Japan hiked interest rates. This could have made the Yen less attractive to investors seeking higher yields and growth opportunities.

As long as these underlying fundamentals remain unchanged, it is likely that market sentiment towards the Japanese Yen will continue to be subdued.

Lazarus
Lazarushttps://ljlnews.com
Publisher and editor of LJLNews. I am a Stock Market enthusiast, with an interest for politics. I hope you enjoy reading the articles! Contact me at: Lazaruslucas@ljlnews.com

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