Time to Back the Yen: TS Lombard
- Written by: Gary Howes
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TS Lombard says yen weakness is set to reverse as bullish conditions quietly take shape.
Japanese yen has been a persistent feature of FX markets in 2026, a surprising outcome given the war in Iran that would typically stimulate 'safe haven' demand for the yen.
But, independent research and strategy providers TS Lombard reckon it's time to prepare for the tide to turn against JPY weakness.
"Bullish setup for JPY," says Daniel Von Ahlen, strategist at TS Lombard.
Here's a snapshot of the call:
"One of the more interesting stories in global macro right now is the persistent weakness in JPY despite the BoJ's strong commitment to normalise policy.
"Culprit of the depreciation is to be found in massive Japanese portfolio outflows. But even if this trend persists, the conditions for a strengthening of the yen are ripening.
"A stronger domestic macro environment, the US-Iran endgame (and, with it, lower energy prices).
"Attractive valuations, the recent upward momentum in JPY rates and a meaningful buildup of short positions all suggest attractive risk-reward in shorting USD/JPY."
