Forex
JPY May Rally on Rising US Rate Volatility
Japanese Yen prices may appreciate due to rising U.S. rate volatility, according to BNY's David Tam.
Tam argues that historical data shows a correlation between increasing rate volatility and JPY appreciation.
The CFTC's Commitment of Traders (IMM) data reveals near-historic levels of net short positioning in the CHF and JPY, with the JPY having seen a steady decline since April 2025.
This positioning divergence could create a trading opportunity, as real money investors prepare for defensiveness while fast money investors lean the other way.