(Original title: Betting that the Bank of Japan will turn to asset management companies to bullish on the yen for the first time since last June)
Zhitong Finance APP has learned that institutional investors have turned bullish on the yen for the first time since June 2021, as market speculation heats up about the Bank of Japan’s future exit from its ultra-loose monetary policy.
The latest data from the U.S. Commodity Futures Trading Commission (CFTC) showed asset managers’ net positions in the yen turned positive in the week ended Jan. 17. The news came ahead of the Bank of Japan’s latest policy meeting. At the meeting, the Bank of Japan stood by its stimulus framework, fighting off bets that a change was imminent.
The Bank of Japan released the minutes of its monetary policy meeting in December last year, showing that many members believed that it is important to continue to ease monetary policy. If necessary, we will not hesitate to step up the easing policy. Some members said the BOJ must clearly explain that widening the yield band is not aimed at exiting its ultra-loose policy.
Asset managers’ net yen positions turn positive
Commonwealth Bank of Australia economist Joseph Capurso and his team said USD/JPY will remain under pressure on speculation the Bank of Japan will soon exit its ultra-loose monetary policy as “persistently high inflation will justify tightening policy. In December, Japan’s inflation rate hit 4 percent for the first time in more than 40 years.
The yen has risen more than 17 percent against the dollar since falling to a 30-year low in October last year, as traders bet the Fed is about to end its tightening cycle and the Bank of Japan (BOJ) is about to start its own.
