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USD/JPY slips as traders delay any immediate yen carry unwind
Japan’s Ministry of Finance was not active Monday, while CFTC data showed speculators still adding yen shorts as USD/JPY fell back from a level just above 160.00.
FXStreet said Monday’s move in USD/JPY came without intervention from Japan’s Ministry of Finance and, based on the latest positioning, the yen carry trade was not fully closed yet. The pair was trading just above 154.00 after giving up close to two yen, and the follow-through bounce recovered less than half of the initial drop.
The report noted that the currency move arrived during a thin-liquidity period, with US markets shut for Labor Day and Tokyo historically using Mondays for operations. It cited mechanics consistent with Japan buying yen when the yen is weak, tied to the September 2025 joint statement that targets disorderly yen weakness rather than strength.
FXStreet pointed to CFTC data released Friday, saying non-commercial net shorts widened by 28.9K contracts to 92.2K in the reporting week, the largest deterioration in the report, and said speculators were still adding to yen shorts on September 1. The article also estimated USD/JPY had fallen roughly six yen from a September 2 high just above 160.00.
The outlet argued the repricing centered on the cost of yen funding rather than a liquidation of what the carry trade funds. It added that BoJ policy is 1%, the US target range is 3.50% to 3.75%, and market pricing implied a quarter point for both the BoJ on September 18 and the Federal Reserve on September 16, leaving the focus on the interest-rate path.
Latest closeUSD/JPY 158.82 ▼0.9%