Moody's: Yen shorts bets will decrease but won't disappear

XCH-3.08%
On September 5th, Jinshi data, Moody's analysts Dave Chia and Stefan Angrick said in a report that it would be wise not to be fooled by the yen's recovery. The yen doesn't look as oversold as it did a month ago, but it's still weak by historical standards. Since the big dump in the stock market in August, bets on shorting the yen have decreased, as stock and bond yields fell and the yen soared. Many attributed this event to the closure of yen carry trades following the unexpected interest rate hike by the Bank of Japan and weak US economic data. With the decline in US interest rates and the rise in Japanese interest rates, speculative actions of shorting the yen will fade, but the motivation to short the yen will still exist due to the relatively low borrowing costs in Japan.
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