This analysis examines potential targets for yen appreciation, using the 120-day moving average as a turning point. The current 120-day MA is considered to be around ¥159.7, and the analysis suggests that the yen could strengthen toward 143–151 if USD/JPY falls below that level.
In recent years, USD/JPY is said to have repeatedly fallen by 5–10% after breaking below its 120-day MA. This time, too, the 120-day MA is expected to be around ¥159.7, and a break below that level is suggested to lead to further yen appreciation toward 143–151. Figure 1 is also referenced.
The analysis says that the positioning of hedge funds and other speculative investors has influenced turning points for the yen. A break below the 120-day MA could prompt the unwinding of yen-selling positions held to limit losses, encouraging yen buying and driving further dollar weakness and yen appreciation. An explanation of Figure 2 is also provided.
In July 2024, intervention brought the dollar's rise and the yen's decline to a temporary halt, while speculative investors' net yen-selling position was substantial. In January 2025, USD/JPY fell sharply, and it is suggested that the expansion of unrealized gains on yen-buying positions provided justification for further yen appreciation. Figure 3 is also referenced.
The sharp decline around this year's Labor Day is said to have reinforced a tendency toward one-directional moves from 7 September onward. The continuation of yen-buying strategies when trading resumes after the summer holidays is presented as a factor that will affect the yen's future strength.