This report summarizes USD/JPY movements from the previous day’s European session through today’s Asian session, along with changes in retail FX investor positions. MXN/JPY changed from second to third place, while overall market movements remained limited.
USD/JPY traded slightly lower from 25 to 26 August, and with US inflation data and remarks from Federal Reserve officials due during the Tokyo session, yen buying prevailed, sending USD/JPY down to ¥158.875. Activity in crude oil futures and interest-rate trends appear to have had an impact. Movements remained limited, with no sharp fluctuations observed.
FX trading volume fell 44.0% versus the 20-business-day average, and although retail investors maintained a net-buying bias, their momentum is weakening. Overall positions remained net long at 57%, while short positions increased and long positions decreased, indicating a shift from closing short positions toward initiating new shorts.
Among the leading currency pairs by market share, USD/JPY retained the top position, while MXN/JPY changed from second to third place, with its market share at 4.3%, as activity diversified into AUD/JPY and other currency pairs. USD/JPY’s share fell 4.9% from the previous day.
Position trends in the major currency pairs showed growing positioning across yen crosses in anticipation of a stronger yen, with shorts increasing in EUR/JPY and NZD/JPY. While both short and long positions in USD/JPY itself declined, short positions in yen crosses stood out.