2 different reasons the yen has been rising (hard!)

Greg on the yen:

• USDJPY is down for the 5th consecutive day. Over that time period, the pair has moved over 650 pips. That's a big move in a short period of time.

For sure! A very rapid move indeed. If the yen weakened at such a pace Japanese authorities would be bashing the newwires with jawboning about how such rapid moves are no desirable. But, nope, nothing from them these past days.

Via Deutsche Bank:

• The yen has drawn support on the back of rising speculation that the Bank of Japan (BOJ) could tweak its YCC policy at its meeting later in the month.

RBC, on the other hand disagree, saying the gains in yen are likely due to the unwinding of extended shorts, with IMM positions long USD/JPY hitting their most extended in 5 years. RBS says its this, not a potential Bank of Japan policy tweak behind the recent bounce for the yen.

I strongly disagree with RBC. For sure, the stretched positioning has played a role, but the catalyst is as DB points out, speculation of BOJ tweak at the July meeting. I wrote about this a couple of weeks ago:

• Heads up folks, the July (27, 28) Bank of Japan meeting is going to be huge - YCC pivot
• More from the BOJ June meeting summary: One member called for early revision of YCC policy
• USD/JPY lower after the BOJ says CPI may not drop below 2%
• BOJ says strong chance CPI will moderate, but not to back below 2% by mid fiscal year