IMM speculators add net yen long position: CFTC

Currency speculators on the Chicago futures market added net long yen positions in the week ended October 26, data from the Commodity Futures Trading Commission showed on Friday.
"Long" positions are de facto bets a specific currency will strengthen, while "short" positions are effectively bets it will weaken.
The International Monetary Market data from the CFTC's Commitments of Traders report on speculative positioning are used by analysts as an indicator of future market direction.
For example, extreme net long positions often signal a decline in a currency going forward, since the build-up of positions reflects what has already happened, not the growing risk of a reversal when the market is heavily positioned one way.
Speculators generally are trend followers seeking to pick a precise top or bottom in the market.
According to the data, yen futures speculators increased net long position to 27,636 contracts from 8,565 the previous week.
This was the highest net long position since mid-February. "It shows that as of Tuesday, speculators were willing to put their money on the line, and essentially throwing down the gauntlet to the Bank of Japan," said Sean Callow, currency strategist at IDEAglobal in New York.
The Bank of Japan, which acts on behalf of the Japanese Finance Ministry, undertakes yen-selling intervention to keep its currency weaker for export advantage. On Monday, Japanese Vice Finance Minister for International Affairs Hiroshi Watanabe said Japan is "seriously" monitoring currency movements in the foreign exchange market and is prepared to take action if the dollar falls too fast against the yen
"Even as we are closing on levels where people are talking about intervention, speculators seem to be saying: 'OK, we'll take you on'," Callow said.
Sterling futures speculators built net long positions to 9,525 contracts from a net short position of 1,701 contracts.
In past sessions, dealers have sold sterling due to indications the Bank of England has completed its currency-boosting rate tightening cycle.
"It looks as though we've moved away from trading sterling as an interest rate play, which was a big deal in the year while they were hiking rates.
Now its just back to being the currency you're happy to use as a vehicle to be short dollars," said the IDEAglobal strategist.