BofA Survey: Negative Sentiment Against Yen Hits Four-Year Peak

According to Investing.com data, Bank of America Global Research’s latest FX and Interest Rate Sensitivity Survey reveals that investors’ sentiment toward the Japanese yen has reached its most negative level since 2022. Concerns over Bank of Japan monetary policy and fiscal risks are driving yen depreciation, while Fed’s inflation-fighting measures have pushed oil prices up by 5%. Meanwhile, Bitcoin dropped to $62,800 amid escalating US-Iran tensions.

■Sentiment against the yen peaks at four-year highs since 2022.

■CFTC data shows leveraged funds holding the largest net short yen positions since 2007.

■Hormuz Strait closure lifted oil prices by 5%.

■Finance Minister Katayama emphasized that monetary policy remains the BoJ’s responsibility.

The BoJ’s upcoming policy meeting on July 30-31 is expected to keep the benchmark rate at 1%, alongside updated economic forecasts. Investors note the dollar’s strength amid Federal Reserve rate policies, while yen pressures intensify. The Ultra 10-Year U.S. Treasury Bond futures also rose, bolstering the dollar’s structural momentum.

Elif Yılmaz Note: Markets remain uncertain whether the BoJ can tighten policy sufficiently to counter yen weakness. With sentiment at a four-year low, investors are weighing risks tied to speculative short positions highlighted by CFTC data. Skepticism grows over policymakers’ ability to act swiftly enough, suggesting further downside pressure on the yen may persist.