Let's say no to yen longs in the coming days

The two-month low is being left behind and the rebound in Asian funds continues.


The index of Asian companies, minus the Japanese, rose by 1.7%, especially the Kospi.

The Shanghai Composite added 1.9% after the news on national loans, and the Nikkei 225 came out on top with a reading of 0.5%.

E-mini futures on the S & P500 gained 0.5%.

The bond market was calm, and the yield was fixed at 1.5% as a result

AllianceBernstein analysts believe that the market continues to be influenced by positive news about vaccination. If the bond market is stable, then there is a reason to assume for a steady growth.

However, is everything so calm?

There are reports from Bengaluru that investors are massively closing long positions and opening shorts. This is especially true for the yuan, which is the main opponent of the dollar in the currency market.

The US economic recovery is making the market nervous.

So, after the closing of the US session and the opening of the Asian session, the USD/JPY currency pair grew steadily until 5:45. Now the chart has gone down with a few false bounces up. The yen is gradually buckling under the pressure of good news from America.

It is important to understand that the Japanese yen is often used to buy dollar bonds. Against the background of rising inflation expectations, the Fed rate is also rising.

Accordingly, the market reacts by shortening positions.

So, the South Korean won and the Singapore dollar went into a bearish trend. They were followed by the Malaysian currency.

OCBC Bank's performance on Asian currencies predicts depreciation. Analysts at this institution are concerned about the near future of the yuan and the yen.

Thus, before the close of the Asian session and until the end of the week, a smooth decline in the USD/JPY currency pair is expected.

And although the dollar is expected to weaken in the long term, long positions are no longer attractive now.

The material has been provided by InstaForex Company - www.instaforex.com