“Stretched Positioning and Japanese Institutional Activity Could Cap Gains in the Yen, Paving The Way for A Bounnce in Nasdaq and Bitcoin.”, – WRITE: www.coindesk.com
There Could Be A Causion Here, AS, FOR DECADES, The Low-Yelding Yen Propped Up Global Asset Prices. The Ongoing Rise in the Japanese Yen May Have Had A Hand in the Recent Risk Aversion on Wall Street and in the Crypto Market.
That said, the bullish positioning in the japanese yen looks overRetched, with speculators Holding Record Longs Last Week, accounting to the cftc data tracked by macromicro. Such Extreme Bullish Positioning, Representing A Collective Belief in A Continued MOVE HIVER IN THE ASSET, SETS The STAGE for DISAPPOINTMENT Bearish Reversal.
In Other Words, The Yen’s Rise Could Stall for Now, Offering Relief To Risk Assets, Including Nasdaq and Bitcoin.
“We Are Now Cautiooos on Chassing Further Jpi Strength, Given Stretched Speculatory Positioning As Well As Strong Dip-Buying Appetite from the Domentic Community,” Morgan Stanley G1 Clients Late Friday.
USD/JPY AND JPY COT INDEX. POSITIVE COT VALUES INDICATE BULLISH Positioning. (Macromicro)
Strategists Explained that Many Japanese Investors Use the Nippons Individual Savings Account (Nisa) School to Snap Up Foreign Assets Dringing Risk-Off, Inadvertently Slowing The Pace. Additionally, The Public Pension System Tends to Go Against the Trend, Rebalanging Out of Jpi Assets.
“Indeed, Such Scenario Happened in Last August After A Sharp Appreciation of the Jpi and the Pronounced Sell-Off In Equities,” Strategists Noted.
Let’s See if History Repeats Itself, Triggering A Renewed Risk-On Sentiment for Nasdaq and Bitcoin. The USD/JPY Pair Turned Up Following the July and Early August Slide to 140, Eventuly Rising to 158.50 by January. BTC Turned Up As Well From The Early August Crash to $ 50,000, Rising to New Record Highs Above $ 108,000 in January.
AT Press Time, Bitcoin Traded Near $ 80.300, Representing A MONTH-TO-DATE DECLINE OF NEARLY 5%, Extending February’s 17.6% Slide. At One Point Early Tuesday, Prices Dipped to $ 76.800, Account to Coindesk Data.
Meanwhile, USD/JPY Traded at 147.23, Having Put in a Five-Month Low of 145.53 Early Tuesday, TradingView Data Show.
TEMPORARY RESPITE?While the Stretched Bull Positioning and Institutional Flows Suggest Relief AHEAD, THESE Factors May Do Little to Alter The Broader Bullish Outlook for Jpi, which is Backed a Naard a nor. Differential.
SO, Risk Asset Bulls Need to Be Vigilant for Signs of Volatility in the Yen and the Broader Financial Markets.
US-Japan 10-YEAR BOND YIELD DIFFERENTIAL. (TradingView/Coindesk)
The Chart Shows of Spread Between Yields on the 10-YEAR US AND JAPANESE GOVERNMENT BONDS.
The Spread has narrowed to 2.68% in a jpy-positive manner, reaching the Lowest Since August 2022. Plus, It Has Dived Out of a Macro Uptrend, Suggesting A Majoor Bullish.
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