Bloomberg Surveillance · Monday, August 3, 2026
Jeremy Stretch notes that extreme yen short positions, reaching two-year highs, coincided with Japan's recent currency intervention. He suggests that this stretched market positioning, combined with volatility unleashed by the Federal Reserve's guidance narrative, created a "fertile ground" for authorities to intervene.
“I think it was very notable that if you look at yen short positions, they were at the most extreme in two years. And indeed we're pretty close to the levels that we hadn't seen since thirteen thousand and seven.”
“So the market was pretty stretched. There was a degree of volatility or a degree of uncertainty which had been unleased in terms of the treasure curve, in particular after the FED guidance narrative.”
“So I think those two things certainly coincided to provide perhaps a fertile ground into the month end for the authority to try and come in and hind a market which you've been heavily skewed in one direction.”