Meanwhile the yen continues its vicious carry trade liquidation cycle with USD/JPY dropping below the 114.00 figure in today’s Asian session for the first time in nearly 3 months. Although Japanese capital markets were closed for holiday the action in FX was triggered by comments from Finance Minister Sadakazu Tanigaki who said that the moves in yen “are in line with fundamentals”. The statement signaled to the market that the Japanese government has no plans to intervene to lower yen’s value and allowed momentum players to short the pair with impunity. Although it is extremely tempting to call for a temporary bottom in the pair as USD/JPY has now had an uninterrupted fall of more than 700 points our proprietary internal positioning guide still shows that speculators are still trying to bottom pick this move with yen longs outnumbering dollar longs by nearly three to one margin. Until this imbalance in positioning improves, the USD/JPY is likely to move lower still despite its oversold status.