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Forex pairs in this Article » EUR/USD, USD/JPY (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank notes that on a 12 mth view the JPY has dropped 16.4% vs. the USD.

Key Quotes

“Most of last year’s yen losses vs. the USD came in the first five months of the year and, after a period of consolidation, in the last two months. Consistent with the rally in USD/JPY, at the end of 2013 CFTC data implied that short yen positions held by speculators had soared to levels not seen since July 2007.”

“This suggests there is risk that the weight of short yen positions leads to some more corrective pressure in the coming weeks. Some technical indicators support this view suggesting that further near-term corrective activity in USD/JPY could be imminent.”

“That said, there are still plenty of bearish factors for the yen in the months ahead. As such we would look to buy USD/JPY on dips.”
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