FxWirePro: Retail sentiment suggests further downside in USD/JPY

The yen has come under renewed selloff as the dollar bulls cleared the 110 hurdle after struggling to break the level through last week.

• The yen has been weakening gradually against the USD, after the infamous flash crash on 2nd January that pushed the USD/JPY pair to as low as 104.6 area.
• Dollar bulls remain in control not just against yen but broader major trading partners.

Retail sentiment suggests further pain in store for yen,

• The sentiment reports from IG Markets, which is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting, strongly suggest that yen is likely to decline against the USD.
• IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used a contrarian indicator since retail positioning moves in the opposite direction to market movements.
• As of today, according to data from IG markets, 54 percent of retail positions are bullish on yen, while only 46 percent are on the short side, suggesting further downside possibility for the yen against the USD.  

USD/JPY is currently trading 110.6 per USD