JPY Shorts Deepen as Traders Risk Overleveraging

The CFTC data for Japan shows that non-commercial net positions in the JPY have moved further into negative territory, falling to ¥-163.4K from ¥-152.1K previously.

This indicates an expansion in net short positioning versus the prior reporting period, with a shift of 11.3K contracts on the same scale.

The data points to increased bearish positioning in JPY among non-commercial traders, which is setting a trap for sellers who are overleveraging their positions, according to VT Markets.

Historically, when JPY net shorts exceed the negative 150k threshold, the currency becomes highly vulnerable to explosive short squeezes, similar to the run-up in July 2024.