AUD/JPY: are Japanese traders now more likely to sell AUD/JPY, NZD/JPY? (BTMU)

Both AUD/JPY and NZD/JPY have bounced relatively sharply from near two-year lows earlier this month, and may now attract selling interest from Japanese investors.

AUD/JPY rallied from a fresh trend low of 78.69 on 7 September, its lowest since November 2016, to 82.35 Friday, while NZD/JPY rallied from a fresh trend low of 72.25 on 10 September, the lowest since August 2016, to 75.54 Friday.

Both have since come off a touch, with AUD/USD and NZD/USD recovering more moderately this month and looking to have peaked on fall-out from U.S.-China trade tensions.

Both crosses also remain in downtrends, capped around their Ichimoku clouds.

Given the toppish nature of AUD/USD and NZD/USD, the Mrs Watanabe retail traders look likely to again take a swipe down in the less liquid AUD/JPY and NZD/JPY.

Japanese investment trusts could join in to hedge what remains of their thinned-out portfolios.

This is especially the case with high-beta trades losing allure for Japanese institutional investors who prefer the safety, liquidity and increasingly, higher yields of more major currencies.