{LONGTERMINVESTORS} Currency Thematic: Long positions increasing in Japanese Yen ...

Currency Thematic – Long positions increasing in Japanese Yen...

 

The BoJ in its September monetary meet changed its focus from balance  sheet expansion to “yield curve targeting”. Concerned with long term yield turning negative, BoJ has  adopted the policy of maintaining 10-year yields near 0%. Despite this targeting, yields on medium-long term bonds are moving lower, pushing the case for Japanese yen appreciation.

Also, lower inflation has led to rising Japanese bond “real” yields. Thus higher real yields, lower inflation and  safe haven currency status would help extend gains in Japanese Yen.

Recommendation
Buy JPYINR (spot) at 63.70 – 63.90, Target: 68, Stop Loss: 61.90

Yields shifting lower despite BoJ’s yield curve control measure
                    of keeping 10-year yield near zero   

 

Further, as per CFTC data, non commercial long Yen positions have been increasing over short positions since January as BoJ moved to negative interest rate regime.

 

For details, click on the link below

http://content.icicidirect.com/mailimages/IDirect_CurrenyThematic_JPYINR.pdf

 

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