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Japanese Yen Sentiment at Extremes – What’s Next?

Japanese Yen Sentiment at Extremes – What’s Next?

David Rodriguez, Head of Product

Why and how do we use the SSI in trading? View our video and download the free indicator here

USDJPY– Retail FX traders remain very heavily net-long the US Dollar versus the Japanese Yen, and a contrarian view of ‘crowd’ sentiment leaves us firmly in favor of selling into weakness. Indeed, our data now shows a significant 80 percent of all open USD/JPY positions are long.

The ratio of long to short positions now matches multi-year extremes set as the pair set key lows near ¥100. This in itself suggests we may be in the midst of a similarly significant sentiment extreme. And yet by definition ‘the extreme’ is only clear in hindsight.

Until we see a substantive swing in retail FX positioning we see little reason to abandon our USD/JPY-bearish trading bias.

See next currency section: XAUUSD - Gold Price Once Again set to Shine

Written by David Rodriguez, Senior Strategist for

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.