Much has been made about the steep fall in the Japanese Yen currency in the ETF media since the beginning of February.

CurrencyShares Japanese Yen (NYSEArca: FXY), which tracks the movement of the currency, traded as high as $129.36 a share in early February before plunging as low as $117.13 earlier this week (a peak to trough decline of more than 9%). [Why Japanese Yen ETFs are in Freefall]

However, on Wednesday of this week, the Yen staged an intraday reversal, and followed that up with a “gap up” on Thursday and has reclaimed nearly 2% in the past two sessions. Interestingly, despite the sudden reversal in price this week in FXY, we have noted redemption activity of substantial size in FXY this week, with more than $110 million leaving the fund (equivalent to about 40% of the assets outstanding in the ETF).

It is apparent that some institution or institutions threw in the towel on the Yen earlier this week as it touched new recent lows, but this could also be a capitulation point given the snapback rally.

From an options flows standpoint, FXY contracts have been quiet for several weeks now although we did note scattered put buying on the way down during the February decline in the Yen. We will watch the options markets closely in coming days to see if there are any signs of bottom fishing, or if this recent move is simply a “bear market” rally in the currency.

CurrencyShares Japanese Yen

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