In a report released on Wednesday the BOJ said it was becoming more important to monitor the influence of hedge funds.
It said activity by hedge funds accelerated slides in the yen between the autumn of 2012 and the first half of 2013, as well as from the summer of 2014 (from ¥102 in August 2014 to almost ¥122 in early December )
- Yunosuke Ikeda, Nomura Securities chief FX strategist said of the ¥24 movement against the dollar in the first case, only about ¥6 can be explained in terms of economic fundamentals, he rest of the movement was largely based on speculative trading, some of which came from hedge funds.
- “Because the yen’s weakness has been driven mainly by speculative activity, we may see at some point a strengthening of the yen with no particular reason,” because of funds unwinding their positions, Mr. Ikeda said. A strengthening beyond ¥115.50 would not be a surprise, he added.
Non-gated Wall Street Journal article.
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Speculative flows a driver of currency rates? Shocked, I am.
