JPY Shorts net at multi-year lows

These are the main important points of CFTC Position Report for the week ending August 6.

• Net Japanese yen shorts extended their retreat over the past week, this time reaching levels last seen in Q1 2021 around 11.3k contracts. During that time, investors continued to buy the yen in response to the shift in sentiment around the currency following the BoJ’s dovish move at its July 31 meeting.
• The neutral tone from the FOMC meeting, the dour NFP data and the brutal BoJ tilt reignited recession fears and triggered a pronounced sell-off in the US dollar in tandem with speculation of an emergency rate cut by the Fed. That said, net shorts in the Greenback fell to eight-week lows and the DXY fell to multi-month lows near 102.15.
• Net longs in the European currency almost doubled from the previous week. While EUR/USD managed to break above the key 1.1000 barrier during the period, this move eventually fizzled out in the following days.
• British pound net longs retreated to five-week lows in line with a weak performance in GBP/USD, which flirted with the critical 200-day SMA near 1.2660 as investors continued to assess the BoE interest rate cut on 1 August.
• Gross Australian dollar longs continued to decline last week, causing net shorts to advance for the third week in a row. Lingering Chinese demand concerns and continued weakness in commodity prices have pushed AUD/USD to fresh 2024 lows near 0.6350 just ahead of the August 5 deadline.