According to @KobeissiLetter, Japanese retail investors reduced net short positions in USDJPY by 561 million between Friday and Tuesday, bringing total net shorts to 2.27 billion, the smallest bearish US Dollar position in at least a year (source: @KobeissiLetter). According to @KobeissiLetter, the positioning shift highlights notable short covering in USDJPY by Japan’s retail cohort, marking a clear reduction in bearish USD sentiment versus JPY over the past year (source: @KobeissiLetter).

According to @KobeissiLetter, the Bank of Japan is offloading its balance sheet as its Japanese government bond holdings fell to about 48% of the outstanding total, the lowest in eight years, down seven percentage points from the 2022 peak, and monthly JGB purchases have been reduced from 5.7 trillion yen.

According to @KobeissiLetter, liquidity in Japan’s government bond market has collapsed as the JGB Liquidity Index jumped to 9.5 on Tuesday, marking the worst liquidity conditions on record (source: @KobeissiLetter). The post adds that the index has doubled over the past 12 months and that stress is unfolding in a roughly $7.6 trillion market, a backdrop that flags higher execution risk for rates strategies and warrants close monitoring of cross-asset liquidity, including FX and crypto risk proxies (source: @KobeissiLetter).

According to @business, a record of discussions from the Bank of Japan’s latest board meeting signaled the next interest rate increase could come as soon as December, matching many market participants’ expectations, source: Bloomberg. For traders, this flags elevated event risk into December for JPY crosses and Japanese rates, with expectations already leaning toward a potential hike as reported by @business, source: Bloomberg.

According to @charlesdhaussy, Sanae Takaichi’s election as Japan’s prime minister is boosting crypto sentiment on expectations of looser policies, with Bitcoin hitting a record high versus the yen (source: @charlesdhaussy on X, Oct 6, 2025). He attributes the BTC/JPY surge to the anticipated policy easing under the new administration, highlighting a bullish local-currency breakout for BTC (source: @charlesdhaussy on X, Oct 6, 2025).

According to @business, strategists expect Sanae Takaichi’s pro-stimulus agenda to boost Japanese equity sentiment, with upside focus on benchmarks like Nikkei 225 and TOPIX as policy support underpins risk assets, source: @business. According to @business, strategists also say her preference for easy monetary policy could weigh on the yen, keeping upside risk in USD/JPY in focus for FX traders, source: @business. According to @business, traders can monitor headline-driven moves in Japanese stock futures alongside USD/JPY volatility, and watch BTC/JPY for spillover from yen weakness into crypto pairs, source: @business.

According to @business, Japan’s stock market is likely to receive support after pro-stimulus Sanae Takaichi won the ruling party leadership, while the yen and long-term Japanese government bonds are expected to come under pressure, indicating equity-positive and FX/bond-negative bias for near-term trades. Source: Bloomberg via @business, Oct 5, 2025.