USDJPY - The retail forex crowd remains net-long the USDJPY, although positioning has narrowed in the wake of a disappointing January Nonfarm Payrolls report and Federal Reserve Chair Yellen's Congressional testimony.
Trade Implications - JPY Pairs: In the burgeoning "risk on/risk off" environment, in which the market takes poor US economic data as reason to drive riskier assets higher (speculation that the Federal Reserve will taper its tapering of QE3), the Japanese Yen is little more than a funding currency.
As the US Dollar has been weighed heavily by falling US yields, we would look to the S&P 500 as a barometer for where the USDJPY is headed and vice-versa. It bodes poorly for USDJPY that it has not been able to rally through
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