Yen Fades from Recent Gains Amid Speculative Position Adjustments

The Japanese yen has continued to trade near 160 per dollar as the impact of the US-Japan intervention begins to fade. The currency had weakened by 0.9% on Monday, but regained some strength during the day, trading at 159.1 per dollar.

After reaching a three-month high of 155.20 following the rare intervention at the end of July, the yen has given back nearly half of its gains. This has led traders to anticipate that authorities will re-enter the market.

Speculators have reduced their bearish yen positions by the largest amount in over 12 years, with a net short position decrease of $8.865 billion to $3.604 billion in the week ending August 4. However, analysts expect speculators to rebuild these short positions.