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Foreign Exchange

IMM: JPY net long position falls to seven-month low

Currency traders on the CME continued to abandon JPY longs, bringing the net JPY long position to the lowest level since July 5, 2011.

The latest Commitment of Traders report, issued by the CFTC, showed JPY net long contracts were cut by 12,000 contracts, or $2 billion, bringing the net long position to $2.7 billion as of Tuesday, February 21. Real-time estimates from Nomura’s FX strategy team suggest net long positioning in JPY is likely to have fallen by another $1.3 billion since Tuesday, as USDJPY reached its highest level in seven months.

USDJPY moved as high as ¥81.58 on Friday and traded above ¥81 for most of Monday’s Asia session before dipping to ¥80.60 as the London session got under way.

Elsewhere, the report shows short positions in EUR were squeezed, as EURUSD broke through $1.34. Net short positioning fell by $0.9 billion as of Tuesday, though the net short in EUR remains extreme at $23.5 billion.

Aside from the yen, the biggest weekly change was in GBP, which saw the net short position cut by almost a quarter. The market remains short 31,000 contracts with a dollar value of $3.01 billion as of Tuesday.

Meanwhile, positioning in CHF is drifting further towards extreme short territory as investors reduced the CHF net short by $0.6 billion to $2.7 billion since Tuesday, bringing the currency to its shortest position since 2007.

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