USD/JPY: positions maybe short, but not short - Scotiabank

Eric Theoret, CFA, CMT FX Strategist at Scotiabank explained that they note that CFTC positioning has deteriorated for the first time in six weeks.

Key Quotes:

"...with a sizeable reduction in JPY longs and modest build in shorts. Measures of sentiment have also shifted, the month-to-date turn in risk reversals suggesting a considerable moderation in demand for protection against JPY gains (USD/JPY downside)."

"The broader tone will likely dictate the near-term path for JPY, with considerable vulnerability resulting from both positioning and sentiment."