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Peter Brandt's EUR/JPY Short Is His Firm's Largest Position as Yen Gains

  • Peter Brandt says a EUR/JPY short is his firm's largest currency position.
  • The ECB pays 2.5% on deposits, double the BOJ's 1.25% policy rate.
  • ECB and BOJ decisions on October 29 and 30 could test the trade.
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Trader Peter Brandt said on X that a EUR/JPY short is now his firm’s largest futures and currency position. The pair has fallen from an April high near 187.5, yet euro rates sit at twice Japan’s.

EUR/JPY, the price of one euro in yen, sat at 175.65 in futures on Brandt’s chart. Still, the European Central Bank (ECB) pays 2.5% on deposits versus 1.25% at the Bank of Japan (BOJ).

Why Is the Yen Gaining Against a Higher-Yielding Euro?

Washington has intervened directly. On July 31, the US Treasury sold euros for yen alongside Japan. The ECB learned of the trade only afterward, the Financial Times reported.

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The action helped lift the yen to 157.57 per dollar from a 163.73 low, CNBC reported.

Meanwhile, Japan’s core inflation reached 2.1% in September. That tops the BOJ’s 2% target for the first time since December, Statistics Bureau data show.

Overnight swaps, which track rate expectations, imply an 80% chance of a December BOJ hike, the Japan Times reported. A hold is expected on October 30.

Likewise, the ECB lifted its deposit rate from 2.25% to 2.5% on September 10, its second hike this year. An energy shock tied to the Iran war has pushed eurozone inflation higher, Euronews reported. ECB President Christine Lagarde has said policymakers are not pre-committing to a rate path.

Can the EUR/JPY Short Survive 2 Central Bank Decisions?

Brandt’s chart shows the pair moving sideways through early 2026 before it broke below a range floor near 180. It has traded under that level since late September, Investing.com data show.

His post offered no rationale beyond the chart. The ECB decides on October 29 and the BOJ a day later.

However, a BOJ hike would favor the short, while an ECB hike or a dovish BOJ hold could test it.

Finance Minister Satsuki Katayama has called an undervalued yen a problem. After the July action, Treasury Secretary Scott Bessent said Washington would not hesitate to join further intervention. That could tie the yen’s path to Washington and Tokyo as much as to the BOJ.

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