16 Jan 2015
JPY increased volatility a threat – BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, shares that Japanese trades are being hit by SNB’s move which has resulted in increased volatility in the currency pairs with margin trading Yen short positions now close to record highs.
Key Quotes
“..there can be no doubt that the decision to abandon the EUR/CHF floor was a massive surprise that will have resulted in large losses for many in the foreign exchange market. The 30% intra-day plunge from 1.2000 and the 18.8% drop on a closing basis is unprecedented for a major G10 currency pair.”
“We highlighted yesterday the potential negative implication of such an extreme move in the major G10 currency pair and risks are certainly high that we could see further market volatility as investors try and manage or recoup losses suffered.”
“Bloomberg is running a story on retail traders in Japan as being hit by the move. This seems quite a logic consequence of the franc move and it is interesting that from our own information on positioning, margin trading yen short positions are close to record highs at present."
"Indeed, taking USD/JPY alone, we believe long positions are now at a record high, at least on the TFX side.”
“Positioning after the dollar is most pronounced in the Australian dollar and South African rand.”
Key Quotes
“..there can be no doubt that the decision to abandon the EUR/CHF floor was a massive surprise that will have resulted in large losses for many in the foreign exchange market. The 30% intra-day plunge from 1.2000 and the 18.8% drop on a closing basis is unprecedented for a major G10 currency pair.”
“We highlighted yesterday the potential negative implication of such an extreme move in the major G10 currency pair and risks are certainly high that we could see further market volatility as investors try and manage or recoup losses suffered.”
“Bloomberg is running a story on retail traders in Japan as being hit by the move. This seems quite a logic consequence of the franc move and it is interesting that from our own information on positioning, margin trading yen short positions are close to record highs at present."
"Indeed, taking USD/JPY alone, we believe long positions are now at a record high, at least on the TFX side.”
“Positioning after the dollar is most pronounced in the Australian dollar and South African rand.”