Prior to last September, the hedge fund world was sitting comfortably long ‘carry-trade’ pairs like EUR, GBP and AUD against the JPY. Then we saw the big clean out when these funds sold out of their longs and tried to go short. Then we had the added phenomenon of proxy-trades, where hedge funds sold JPY crosses to hedge against their illiquid positions in equity derivatives. What we are witnessing now is the big short cover. A major UK clearer told us two weeks ago that GBP/JPY would hit 160 before last Friday. He was wrong by a day. My targets for these moves are 150 in EUR/JPY, 175/180 in GBP/JPY and 85 in AUD/JPY. That’s where I go short.