Long Spec JPY Positions To Pull-Back Ahead Of BoJ April Meeting - BTMU

JPY non-commercial sector long positions at the CFTC are still at recent highs, and some investors may pull back ahead of BoJ April meeting, notes BTMU.

"Fundamental and underlying flows still point to a USD/JPY drop.

The past two months, market reactions have clearly reflected weak confidence in QQE with negative interest rates. Extra monetary easing and a more negative policy rate are unlikely to support a USD/JPY rise.

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Japanese lifers will release their FY16 investment strategies toward the end of the month. We think they will be less active with JPY selling and currency hedging amidst the recent fragile risk sentiment,"BTMU argues.

BTMU is neutral on USD/JPY around current levels seeing the pair trading in a 108-110.50 range in the very near term.