Yen Hits Three-Session Low as Real-Demand Selling Trumps Intervention
The Japanese yen has been declining for three consecutive sessions in the Tokyo foreign exchange market, reaching as low as ¥159.45 against the dollar on the 25th.
This decline is not driven by speculative forces like hedge funds, but rather by real-demand selling from corporations settling import payments.
The current situation differs from past episodes of yen depreciation, where speculative players were a major contributor to the decline.
According to calculations by Mizuho Bank based on CFTC data, speculative yen short positions totaled around $4 billion as of the 18th, which is roughly one-third of the $12 billion seen before coordinated intervention in the past.
The main driver of the depreciation is corporate trade settlements due to an inversion in export and import price growth rates.