The Japanese Yen finished the week near fresh monthly highs against the downtrodden US Dollar, but sharp rallies in the US S&P 500 and other risk sentiment barometers urgented the currency to losses against virtually all other counterparts. An earlier week descend in equities gave hope that the Japanese Yen would forced a sustained turnaround against the majors yet markets clearly had other things in mind. We have found ourselves on the wrong side of the ‘risk’ trade for quite some time now.  Actually , our calls for Japanese Yen reversals on clear sentiment extremes have proven premature at best. A continued build in Japanese Yen  short positions nonetheless suggests that the Yen could rally sharply on episodes of financial market duress. Yet fresh 2009 highs in the US S&P 500 clearly gives us reason for pause for our Japanese Yen  bullish outlook, and it will be critical to watch the trajectory of financial market risk sentiment.

Tags:  2009 bullish forecast japanese yen