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Net Yen Shorts Surge Even As Euro Shorts Hit Fresh Record, And Cable Sentiment Near Record Negative
The carry trade rout is accelerating, even as the euro keeps hitting new spec short records. After the prior week's (March 23) net short exposure hit a new record of -74,917, net euro shorts hit a new all time record of -85,326. This is occurring even as the cable saw last week's record shorts of -71,624 tighten marginally to just -67,073. Yet the biggest stunner was the whopping collapse in Yen net short positions, which moved from +10,161 to -30,866: the biggest net short in the Japanese currency since 2007. This is happening just in time for the Yen to hit fresh 7 month lows against the dollar, as the Yen is back to being the funding currency for all carry trades. The one currency which is openly being sold by its central bank, the CHF, saw shorts increase by 5.5k from -1,088 to -6.540.
EUR:
JPY:
GBP:
CHF:
Source: CFTC Commitment of Traders Data
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It's hard to fight a trend, but the short squeeze potential is frightening.
Since Japan is one of the most fundamentally and financially sound developed economies in the world, shorting the Yen is like playing with fire.
When on earth will hedgies and investors finally learn, "interest rate != return"?
Japan is at least a decade ahead of the rest of the world in terms of consumer de-leveraging. Credit cards are fairly uncommon in Japan. Nobody believes in the easy credit tooth fairy. These dumb Yen-shorting hedgies are going to get their heads ripped off once the USD$ starts rolling over.
I respectfully disagree. Japan is not a financially sound country by any stetch of the imagination.
I guess you missed the demographics part of the equation.
Got any numbers to back that up? Debt/GDP is horrible for japan, demographics are worse. Canada meets your description, Japan does not.
Japan runs a trade surplus with the rest of the world. They have industrial capacity that is able to, even in the severe long-term deflationary environment for high-value engineered goods and services, maintain a trade surplus. They also hold an insane amount of foreign reserves.
Their demographics are a positive thing; 95% of the world would give their left nut to live in Japan and earn the salaries that are paid to Japanese workers. A massive industrial machine combined with a declining population = rising living standards for the remaining Japanese people.
Wall Street hedge fund types hate Japan because Japan is the antithesis of a finance-bloated economy that is present in the USA. But producers always, in the long run, win out over consumers, and Japan will take its rightful place in the global economy as consuming nations collapse economically.
The BOJ does not like a strong Yen and will intervene if necessary. Think about that.
So when will the USA label Japan as a currency manipulator as they are doing with China? How about the Swiss Franc, the USA needs to label the Swiss a currency manipulator too, right?
Ahh, but we all know China is... different.
Japan is still buying treasuries to be under the US military umbrella.
Oh.. Just like the USA Federal Reserve doesn't like a strong dollar, and has been trying to intervene.
Just how successful has that been for the USA? Why would it be successful for the BOJ?
Usually all the BOJ-bashing comes down to, "wah, wah, zero interest rates on Yen means you get no return on your cash". But the Yen has retained and grown its purchasing power immensly over the past 2 decades; can the same be said about the US dollar, with the past 2 decades of non-ZIRP?
Its the Yens turn.
When there's blood in the water. Sharks will come.
Guaranteed that all the major players incl "Gods Banker"
have had their roundtable discussions on how to get their pound of flesh,
and the legality will be questionable.
It seems to me that the GBP will be the first one to roll off the cliff to its fiat currency graveyard. Good riddance.
The Euro, or the multiro is sure going to try and give the pound a run for it
Trading on what you want to happen can be dangerous. These days even trading on fundamentals can take a long long time to pay off. You have to go all the way and never capitulate.
I am Miles Kendig and Ranger's always go all the way.
Well, I'm up 3.5% doing the yen short - in a week. Time to quit? Or press on?
if usdjpy goes north, eurjpy and gbpjpy will follow. that would prop eurusd and gbpusd up some, most likely not causing a trend reversal but a quite nasty short squeeze towards 1.3950ish for euro.
Judge said to the defendant: "You're guilty"!
Defense attorney rises and says, "Judge, that's wrong"!
Judge says to defense attorney, "You're right"!
Prosecutor says, "Judge, the defense attorney can't be right"!
Judge says to the prosecutor, "You're right!
Bailiff says to the judge: "Judge, they can't both be right!"
Judge says to the Baliff: "You're right, too!"
This is good for stocks? I think CNBC said its good for stocks
Lots of bets getting made here. Always a worrysome sign. The long bet in the Mexican peso is 109,000. The highest long position since 2008.
These bets may be "right" but I doubt that it all going to come so easy with these big positions on.
Heads up in Forex, this status is ripe for a shakeup.
The sloooowwww race to the bottom!
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