From Sean’s lips to the forex god’s ears…AUD/JPY was smashed lower in Asia overnight with dealers now blaming the selling on margin calls on Japanese retail investors. Another example of crowded trades being unwound in thin year-end markets.
Looks like Mrs. Watanabe was given the option of coming up with more cash or having her position closed out and chose the later…As we saw during the worst of the financial crisis last year, margin-call liquidation moves are punitive, to say the least.
The cross has recovered dramatically, now at 80.20 from 78.65 lows.
