Yen Unwind to Take Many Months to Hit Fair Value, BNY Says
- Japanese currency may advance to 100 per dollar over time: BNY
- Carry positions dumped amid fears of US recession, BOJ hikes
Japanese 10,000 yen banknotes.
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Unwinding of yen-funded carry trades has further room to run and the Japanese currency may strengthen toward 100 per dollar over time, according to BNY.
Investors are still too bearish on the yen and short positions will continue to be slashed, said Bob Savage, the firm’s head of markets strategy and insights. An analysis shows the yen is too cheap at its current level of 147 and its fair value over time should be more toward 100, he wrote in a note.