JPY: USD/JPY - Fails To Pullback With US Yields & USD

The USD/JPY range Friday night  was 159.96-160.38, Asia is currently trading around 159.90. The pair has topped out above 160.00 again and is having some sort of a pullback thanks to the broader dollar complex coming back under pressure. The MOF/BOJ have seemingly drawn a line in the sand above 160 but the market is attempting to push them into a corner. Japanese officials will be breathing easier given the moves in the USD, a softer dollar takes some of that pressure off for now. A move back above 160-161 would be very problematic for them as it could see the pair really begin to accelerate higher if they are not around to stop it. On the day, the first support is toward 159.00-159.50 and then the 158.00 area. The CFTC positioning shows the market is again sitting very short Yen as they continue to press the Japanese officials resolve, so they are vulnerable should the USD capitulate on a signed peace deal. The underlying story regarding Yen weakness remains the same though and core positions are reflecting that. The BOJ meeting tomorrow will also be key to that story; can they be hawkish enough to add to the current USD headwinds. 

• “Japan’s Sanae Takaichi plans to propose a joint stockpile of critical minerals at the G7 leaders’ gathering.” - BBG 
• “Takaichi hailed UK defense cooperation during a meeting with Keir Starmer, despite uncertainty about a new fighter jet program. The two countries were also expected to sign an £18 billion clean energy investment deal.” - BBG
• CFTC Data up to 09/06/2026 shows Asset Managers continuing to add to their very newly built short Yen position, -76 773(Last -62 814). The Leveraged community did the same, adding to their already own larger core shorts, –115 036(Last -105 136).
• Options : Close significant option expiries for NY cut, based on DTCC data: 159.00($739m), 160.00($960m), 162.00($937m). Upcoming Close Strikes : 155.00($1.74b June 18 ), 158.00($2.1b June 16), 164.00($1.71b June 16) - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 55 Points
• Data/Event : Tertiary Industry Index MoM

Fig 1 : JPY CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P

"*TRUMP: STRAIT WILL OPEN UPON SIGNING ON FRIDAY
*TRUMP: STRAIT WILL OPEN ON FRIDAY DUE TO MINE REMOVAL
*TRUMP: OIL WILL FLOW ON BOTH ENDS AGAIN FOR THE REGION" - BBG

Donald J. Trump on Truth Social:

This Great Deal will bring Peace and Security to the whole Region. Many presidents have tried to make Peace with Iran, and all have failed before me. The Leaders of the Region have, for the first time, found a President who can help them achieve real Peace. With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World! President DONALD J. TRUMP

The NZD/USD had a range Friday night of 0.5811 - 0.5839, Asia is currently trading around 0.5860, +0.45%. The NZD has followed the border USD weakness and had a decent surge higher this morning on the deal announcement. The NZD was the best performing DM currency last week and with positioning still quite short it could continue to do well should this agreement hold. The NZD held the lows of its recent 0.5800-0.6000 range and with a MOU looking to be signed this Friday, that support should remain solid and we could see the pair shift higher. On the day, this means we might try higher initially but I suspect the 0.5875-0.5925 area could see sellers return first up.  A signed deal and traffic flowing back through the Straits of Hormuz would most likely see the broader US dollar complex come back under pressure again, this would potentially be problematic in the short-term for a market that is very bearish the NZD and positioned that way. 

• Bloomberg - “The New Zealand dollar gained 0.52% against the US dollar in the week to June 12, beating all other developed market currencies.”
• CFTC Data up to 09/06/2026 shows Asset Managers adding back to their recently reduced core short positions in the NZD, -31 785(Last -26 177). The Leveraged community pared back their own core shorts, -22 354(Last -27 797). 
• Options : Closest significant option expiries for NY cut, based on DTCC data:  0.5830(NZD526m). Upcoming Close Strikes : 0.5750(NZD450m June 17), 0.5890(NZD514m June 18), 0.5900(NZD351m June 16) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 51 Points
• Data/Event: Performance Services Index, Card Spending 

Fig 1: NZD CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P