Archive · 4 Sep 2026
JPMorgan Warns Yen Short Unwind Could Drive Bigger Gains
Some investors had been betting that the yen would weaken.
JPMorgan says many of those bets may still be open.
If the yen becomes stronger than 155 per dollar, those investors might rush to close their bets.
That could make the yen rise even faster.
JPMorgan estimates the open bets are worth about $103 billion.
If all of them were closed, the dollar could fall to between 142 and 146 yen.
The recent rally was also linked to possible changes by Japan’s pension fund and expectations of faster interest-rate increases.
However, JPMorgan does not currently expect the exchange rate to fall far below its 155–165 range.
JPMorgan estimates ¥16 trillion to ¥17 trillion in bearish yen positions remain outstanding.
A break below 155 yen per dollar could trigger additional short-position selling, strategists say.
A complete unwind could theoretically push dollar-yen into the 142–146 range.
Dollar-yen recently fell from 160.39 to as low as 155.30 after a sharp yen rally.
JPMorgan says expectations for Government Pension Investment Fund and Bank of Japan changes may be excessive.
- Who
- JPMorgan Chase & Co. strategists, including Junya Tanase, analyzed the yen’s short positions.
- What
- The strategists warned that a further unwinding of bearish yen bets could accelerate the currency’s gains.
- When
- The warning followed a sharp yen rally earlier this week and came after recent price action.
- Where
- The movement concerns the dollar-yen exchange rate and Japanese currency markets.
- Why
- A break below 155 per dollar could force investors to close short positions, while expectations of Bank of Japan rate hikes and possible pension-fund changes have supported the yen.
Further Yen Gains
Limited Downside
Impact of Short Positions
Further Yen Gains
JPMorgan says a break below 155 could cause selling to generate more selling as investors close bearish yen positions.
Limited Downside
JPMorgan’s warning is a risk scenario, and the bank does not currently assign a high probability to a major move below its 155–165 range.
Policy Expectations
Further Yen Gains
Expectations of faster Bank of Japan rate hikes and possible Government Pension Investment Fund allocation changes have helped drive the yen higher.
Limited Downside
JPMorgan says market expectations surrounding both the pension fund and the Bank of Japan appear somewhat excessive.
- Estimated short positions
- ¥16 trillion to ¥17 trillion, or approximately $102.6 billion to $103 billion
- Potential dollar-yen range
- 142–146 if the bearish yen positions were completely unwound
- Key threshold
- A break below 155 yen per dollar could intensify selling
- Recent high
- Dollar-yen reached 160.39 earlier this week
- Recent low
- Dollar-yen fell to as low as 155.30
- JPMorgan’s assumed range
- 155–165 for dollar-yen
- Market catalysts
- Possible Government Pension Investment Fund allocation changes, faster Bank of Japan rate hikes, short covering and domestic-investor hedging