USD/JPY has crumbled in a flash for the second time today, this time dropping to 97.77 from 98.50.
Once again the drops in yen crosses are accompanied by stock market weakness but nothing of the scale that would point to such swift drops. These deep falls in relatively liquid times of the day with no news is a shock.
If you look at euro and yen positioning, speculators were absolutely on the wrong side of today’s trade and this could be part of a race to the exits but usually professional traders can get out much more smoothly. It’s like a fund is blowing up somewhere.
EURJPY three days
On of the factors is a blowout in Nikkei futures, which are down nearly 3%.
