#YenShortSqueeze
About YenShortSqueeze
Treasury Secretary Bessent warned yen shorts, claiming asymmetric information on Japan policy. USD/JPY fell from 160.39 to 153.53, yen at its strongest since February. Flows diverge: Japanese retail holds roughly 3.61T yen net short, while overseas investors unwind carry trades and options target below 150. Japan reserves fell $79.6B in August, likely from Treasury sales. JPMorgan: orderly appreciation could ease JGB pressure and benefit AI, semis and real estate, while pressuring exporters.
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154.06！El yen sube a su nivel más alto desde febrero, superando el pico de la intervención conjunta Japón-EE.UU.
El tipo de cambio del yen frente al dólar estadounidense ha alcanzado su nivel más alto desde febrero de este año, superando con fuerza el pico establecido por la intervención conjunta anterior entre Japón y Estados Unidos. Las expectativas del mercado sobre una subida de tipos por parte del Banco de Japón continúan aumentando, y la confluencia de múltiples factores técnicos impulsa esta ronda de apreciación más allá de los resultados de la intervención política previa.
Durante la sesión de Lond
Japan is the largest foreign holder of U.S. Treasuries. To defend the yen, they may be forced to sell those bonds, pushing U.S. yields even higher.
The U.S. cannot afford higher rates with trillions in debt needing refinancing.
It’s simple: money printing will accelerate.
Bull Theory
🚨 JAPAN’S YEN INTERVENTION IS BECOMING A BIG RISK FOR U.S. BONDS.
Japan spent nearly $100 billion buying yen after it fell close to a 40 year low of 164 per dollar.
To fund this intervention, it possibly sold over 6% of its foreign reserves worth nearly $1.2 Trillion.
This matters because Japan is America’s largest foreign bondholder. Nearly 70% of Japan’s reserves are estimated to be invested in US Treasury bonds.
If Japan keeps selling, bond prices could fall and yields could rise, making borrowing even more expensive across the U.S.
The pressure is already visible. The 30-year yield recently touched 5.34%, its highest since 2007, while the 10-year reached 4.81%.
This could not have come at a worse time.
Investors are already demanding higher returns because of inflation, rising oil and America's growing fiscal deficit.
The Treasury is trying to calm the market by doubling its long term bond buybacks to at least $4 billion per operation.
The yen has now recovered to around 155 per dollar.
But if it weakens again, Japan may be forced to sell even more.
Japan is trying to protect its currency, but continued intervention could shift that pressure directly into the U.S. bond market.
🚨 JAPAN’S YEN INTERVENTION IS BECOMING A BIG RISK FOR U.S. BONDS.
Japan spent nearly $100 billion buying yen after it fell close to a 40 year low of 164 per dollar.
To fund this intervention, it possibly sold over 6% of its foreign reserves worth nearly $1.2 Trillion.
This matters because Japan is America’s largest foreign bondholder. Nearly 70% of Japan’s reserves are estimated to be invested in US Treasury bonds.
If Japan keeps selling, bond prices could fall and yields could rise, making borrowing even more expensive across the U.S.
The pressure is already visible. The 30-year yield recently touched 5.34%, its highest since 2007, while the 10-year reached 4.81%.
This could not have come at a worse time.
Investors are already demanding higher returns because of inflation, rising oil and America's growing fiscal deficit.
The Treasury is trying to calm the market by doubling its long term bond buybacks to at least $4 billion per operation.
The yen has now recovered to around 155 per dollar.
But if it weakens again, Japan may be forced to sell even more.
Japan is trying to protect its currency, but continued intervention could shift that pressure directly into the U.S. bond market.
