Archived IMT (2008.12.22)

Open interest activity in the Chicago Mercantile Exchanges International Money Market of currency futures illustrates the notable rise in net long positions in the Japanese yen against the U.S. dollar over the past 3 months (red graph). But a closer look at the diversion between the yens price action and rise in net longs shows the currencys strengthening to have grown disproportionately faster than the rise in speculators contracts. This highlights the broadening interest in the Japanese currency from spot, options and futures markets against the US currency. Although 2008 has proven a tale of two halves for most currencies, the yen persisted in its role as the strongest currency in 2008, gaining over 24% against gold, versus the dollars 7% increase against the precious metal.