Oct 25, 2022
VOT Research Desk

Market Insights, Considerations & Analytics

US Treasury yields are slowly declining, while the dollar against the yen is trading under 150.

Additional Yen involvement is likely, which will cause volatility.

According to reports, the Japanese Ministry of Finance invested more over JPY 5.4 trillion on Friday to support the faltering Yen against the raging US dollar. According to market rumours, the MoF was back in the marketplace on Monday. After coming close to USD/JPY 150, the pair abruptly dropped to 145.50 before gradually rising once more. But today, as traders get ready for the next move, the pair has only traded in a little range of about 70 pip.

Intervention in the foreign exchange market by the Bank of Japan (BoJ)

On the 5-minute USD/JPY chart, the pair has traded in a very narrow range, with the exception of a small drop to 148.45 before the session started.

Until Friday, when the Bank of Japan (BoJ) delivers its most recent monetary policy decision, USD/JPY may remain range-bound. While no change to the Bank Rate is anticipated, the BoJ will also present its Quarterly Perspective Report. This document will provide the market with additional insight into the Bank’s viewpoint and how they anticipate the future state of the economy.

According to data from retail traders, 21.75 percent of traders are net long, with a short-to-long ratio of 3.60 to 1. While the number of traders who are net-long has increased by 4.44% from yesterday and by 10.53% from the previous week, the percentage of traders who are net-short has increased by 10.50% from earlier and by 10.87% from the previous week.

Since we normally don’t agree with the general consensus, the fact that traders are net short signals that the price of the USD/JPY may rise further. While positioning is less net-short than last week, it is less net-short than earlier. We have a further mixed USD/JPY trading bias as a result of the present mood and previous adjustments.