Analysts at Deutsche Bank explained that there is an active debate on the current state of JPY positioning.
"If the derivatives market signals are correct, we should see some sizable trim in CFTC net long yen non-commercial positioning in the next couple of weeks, making positioning a much less scary factor for yen bulls.
USD/JPY’s daily correlation with the S&P has remained reasonably high (a 0.54 correlation for levels based data in the last month), but the relationship shows classic statistical drift, because the yen gains more on risk-off days than it loses on risk-on days.
This is an important bullish yen signal.
The yen had weakened in each March since 2008, which presumably has some linkage to Japanese fiscal yearend, but also reflects some seasonal risk-on bias.
The yen is holding its own this March is a bullish JPY statement.
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USD/JPY won’t run away on the downside in part because the technical levels that were resistance in the USD bull run are now acting as downside brakes.
An example is the Y110 level that is now key support. Nonetheless, the conclusions from the above still favor selling USD/JPY upticks more than buying downticks, especially if CFTC data confirms JPY longs have been at least moderately trimmed."
