Peter Brandt’s EUR/JPY Short Is His Firm’s Largest Position as Yen Gains
Trader Peter Brandt mentioned on X {that a} EUR/JPY quick is now his agency’s largest futures and forex place. The pair has fallen from an April high close to 187.5, but euro charges sit at twice Japan’s.
EUR/JPY, the value of 1 euro in yen, sat at 175.65 in futures on Brandt’s chart. Still, the European Central Bank (ECB) pays 2.5% on deposits versus 1.25% on the Bank of Japan (BOJ).
Why Is the Yen Gaining Against a Higher-Yielding Euro?
Washington has intervened straight. On July 31, the US Treasury sold euros for yen alongside Japan. The ECB realized of the commerce solely afterward, the Financial Times reported.
The motion helped carry the yen to 157.57 per greenback from a 163.73 low, CNBC reported.
Meanwhile, Japan’s core inflation reached 2.1% in September. That tops the BOJ’s 2% goal for the primary time since December, Statistics Bureau knowledge present.
Overnight swaps, which observe charge expectations, suggest an 80% probability of a December BOJ hike, the Japan Times reported. A maintain is anticipated on October 30.
Likewise, the ECB lifted its deposit charge from 2.25% to 2.5% on September 10, its second hike this 12 months. An vitality shock tied to the Iran warfare has pushed eurozone inflation greater, Euronews reported. ECB President Christine Lagarde has mentioned policymakers usually are not pre-committing to a charge path.
Can the EUR/JPY Short Survive 2 Central Bank Decisions?
Brandt’s chart exhibits the pair transferring sideways by way of early 2026 earlier than it broke beneath a variety flooring close to 180. It has traded below that stage since late September, Investing.com knowledge present.
His submit provided no rationale past the chart. The ECB decides on October 29 and the BOJ a day later.
However, a BOJ hike would favor the quick, whereas an ECB hike or a dovish BOJ maintain may take a look at it.
Finance Minister Satsuki Katayama has referred to as an undervalued yen an issue. After the July motion, Treasury Secretary Scott Bessent mentioned Washington wouldn’t hesitate to affix additional intervention. That may tie the yen’s path to Washington and Tokyo as a lot as to the BOJ.
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