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Forex Flash: Recent Sovereign Bond price action in anticipation of Japanese developments - BBH

FXstreet.com (Barcelona) - Brown Brothers Harriman analysts believe that a good part of recent price action in sovereign bonds and emerging markets has been done in anticipation of what Japanese investors might do given that the BoJ is going to be buying 70% of new issuance through the end of the year.

They see that the available data from the MOF showed Japanese investors were net sellers of foreign bonds in the week ending April 5 as they have done nearly every week this year. Further, in the CME currency futures for the week ending April 9, speculators reduced gross short and gross long yen positions in roughly equal amounts, leaving substantial gross and net short yen position. They write, “In addition, since the BOJ's announcement on April 4, it appears that the yen tended to strength in the Tokyo session, though in margin trading, it appears there has been yen selling.”

Forex Flash: Global growth concerns trigger yen short squeeze - BTMU

Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the Yen has strengthened sharply since the end of the last week with USD/JPY declining from close to the 100 level on Friday to an intra-day low of 95.80 in late trading yesterday.
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