Net Yen bets turn positive for the first time in years [Video]

The week starts on a mixed note in Asia, after major US indices recorded their best week since last October and boosted appetite in global risk markets. It looks like the mini panic of the beginning of the month has well reversed. The VIX index is back to the pre-panic levels. We don’t have a busy economic calendar this week, but the central bank policies and rate discussions will be on the menu of the week as the annual Jackson Hole meeting will begin on Thursday, Federal Reserve (Fed) Chair Jerome Powell will speak on Friday, and many other central bankers will speak at the event. Price-wise, the US dollar is softer on Monday, the dollar index is testing the August support but the market pricing remains more dovish than what the Fed is set to deliver at the September meeting (with around 30% probability given to a 50bp cut), and also more dovish than what the Fed could deliver for the rest of the year. The Japanese yen, on the other hand, is better bid this morning as the net speculative yen positions turned positive for the first time since March 2021 and big players are increasing bets that the Bank of Japan (BoJ) will continue hiking the rates despite the sharp market reaction.