Yen short positions are overheating, intervention is imminent, but fundamentals are the main cause.

Coin World News reported that Shota Ryu, a strategist at Mitsubishi UFJ Morgan Stanley Securities, said the main driver behind the yen’s weakness is Japan’s own underlying fundamentals, such as the continuously widening digital services trade deficit and the growing overseas investment by individuals and companies in Japan. Ryu said speculators have built up a large number of short positions in the yen on the futures market, which indicates that trading has become overheated. He added that this would give Japan’s government a reason to take intervention measures to support the yen. Japanese Finance Minister Satsuki Katayama said on Tuesday that the government is prepared to take “decisive” action in the foreign exchange market if necessary.