USD: USDJPY tests next MNI resistance

Bank of America write “February stripping activity suggests a notable bid from pensions alongside a continued improvement in funding status.”

• “Japanese pensions also took part in the buying activity and dominated the otherwise weak picture for foreign flows.”
• “Banks appear to be slowly adding to Tsy holdings.”
• “Futures open interest suggests more shorts covered vs new longs created. We see still some shorts outstanding that are vulnerable, but most positions are long.”
• “CFTC data continues to show a reduction in scale of the basis position. We think in part this may be driven by asset managers pivoting duration risk from futures to credit.”