Investing.com – The Japanese yen is likely to weaken further, Bank of America Securities said, citing its latest FX and interest rate sentiment survey.
At 10:25 ET (1425 GMT), the pair was trading 0.2% higher at 155.83 yen, having gained just under 2% this week as the yen weakened again.
Japanese authorities appear to have spent nearly $60 billion last week, pushing the yen off a 34-year low of 160.24 yen against the dollar.
So far, the bank’s survey has shown a sustained bullish bias for the yen since mid-2022, according to analysts at BOA Securities.
Since USDJPY broke new highs in April, investors have switched to the largest yen short position since 2022, and there is deep skepticism about the effectiveness of Japanese currency intervention.
The bank said most fund managers surveyed expect USDJPY to retest the 160 yen level, with none expecting a reversal to 150 yen.
“While we broadly share these views, the JPY’s reversal may warrant caution on short positions in the near term,” the bank added.