Namzes Cycles
Hurst Cycle & Technical Analyst, Commodities/Crypto/Equity Indices, Risk Management Background
Futures positioning supports further yen weakness. Commercials went from 159K contracts long before the yen intervention to 124K net short after covering in two chunks, while CTA shorts squeezed by the BoJ are now net long as open interest rose. It adds to the earlier case: after the BoJ's 25bp hike to 1.25%, the real policy rate stays negative with 1.9% inflation rising and yet to fully reflect the oil shock, so the yen likely keeps weakening while oil and products climb. x.com
The yen's weakness will likely continue because Japan's real policy rate is still negative despite the BoJ's 25bp hike to 1.25%. Inflation of 1.9% is trending up and has yet to fully reflect the oil shock, so as long as oil and product prices rise the yen stays pressured; fiscal deficits also need normalizing. The well-telegraphed hike came after intervention flushed out speculators, and USD/JPY has recovered to the 155 area, with next targets at 158.39 and 158.87. x.com
Japan's yen interventions only buy time, so the yen is likely to keep weakening until the Bank of Japan actually moves. Reserves only help while rates stay pinned, and each round costs reserves Japan can't replace while buying less time, making intervention a speed bump for the carry trade. Japan did not save USD/JPY 160 but rented time at it; once 162 prints, the intervention narrative dies. x.com x.com x.com x.com
The yen stays weak because intervention cannot fix Japan's deeply negative real rates and a sluggish central bank. Japan deployed up to $95.6 billion over two days, and joint intervention with the US Treasury briefly lifted the yen about 2.8%, but about 85% of that rally has evaporated, with USD/JPY back near 159. The yen has lost 30.6% against the dollar in five years. Intervention did warn speculators off the 160-164 zone, and yen net shorts fell $8.865 billion in a week, the most since 2014. … Show more
The yen is strengthening sharply toward ¥153-154 as the Bank of Japan hikes rates and intervenes, starting to unwind the global carry trade funded by cheap yen. That is not a normal FX move but a systemic margin call on every leveraged position funded in yen, with the BOJ now playing its own game rather than following the Fed. x.com
The Japanese yen is weakening again despite the coordinated Bank of Japan and US Treasury intervention, having given back about 38% of the manufactured gain. More government intervention looks likely soon as the currency slides. x.com x.com
Currency interventions are only a band-aid for the Japanese yen's decline. Treasury Secretary Bessent and the Bank of Japan spent $90B to halt the slide when USDJPY hit 164, and the move has already recovered nearly half. x.com
The yen could see a violent short squeeze, as Treasury Secretary Scott Bessent claims asymmetric insight into Japan's next policy move and openly dared traders to short it, saying "I am the house now." If Japan tightens or intervenes again, unwinding the huge leveraged yen carry trade could force liquidations across stocks and crypto. @QmoCrypto notes Japan has sold about $71 billion of Treasuries while defending the yen. x.com
The yen keeps weakening despite repeated intervention, with dollar-yen back at 156. The US has no choice but to fund as many rescues of the yen as the BoJ wants, since otherwise Japan would be forced to sell its US Treasuries. The BoJ meets on the 18th, and it is unclear what it can even say. x.com x.com
The yen's intervention-driven rally looks weak and likely to fade, with USD/JPY possibly back near 160 soon. The Fed's EUR/JPY sale came after 4pm on a dead July Friday, signaling weakness speculators will test. Japan is slow-walking supporting policy such as rate hikes or repatriation incentives, and Bessent wants a lower USD/JPY without the US asset drawdown repatriation brings. If USD/JPY fails to regain 160 soon, though, the yen could rally hard, with spec shorts at record extremes. x.com … Show more
The yen looks set to strengthen sharply, with USD/JPY heading to 130. The call comes as hedge funds turned the most negative on the yen since 2007, per CFTC data cited by @financialjuice. x.com
The yen remains under pressure, and the Bank of Japan's record interventions look increasingly hard to sustain. Japan's foreign exchange reserves fell by $77 billion after record interventions in May. The BOJ wants demand-driven inflation from rising wages and consumption, but a sliding yen risks supply-side inflation instead, leaving it between a rock and a hard place. x.com x.com
