Brandt's Biggest FX Bet Is Short EUR/JPY as Yen Strengthens

On X, veteran trader Peter Brandt stated that his firm now holds a short EUR/JPY position that is the biggest in its futures and currency books. Since April, the pair has dropped from near 187.5, even though euro deposit rates are double those in Japan.

According to Brandt's chart, the EUR/JPY futures rate was 175.65. Meanwhile, the ECB's deposit rate is 2.5%, compared with the BOJ's 1.25%.

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

Direct intervention came from Washington. On July 31, the US Treasury, together with Japan, sold euros to buy yen. The Financial Times noted that the ECB was informed of the transaction after it had occurred.

As a result, the yen strengthened to 157.57 against the dollar, up from a 163.73 trough, according to CNBC.

In September, Japan's core inflation hit 2.1%, data from the Statistics Bureau show. That level surpasses the BOJ's 2% goal, the first time since December.

According to the Japan Times, overnight swaps suggest an 80% probability of a BOJ rate increase in December. For October 30, a hold is anticipated.

The ECB also raised its deposit rate by 25 basis points to 2.5% on September 10, marking the second increase in 2026. Euronews reported that an energy shock from the Iran war has driven eurozone inflation up. ECB President Christine Lagarde stated that policymakers are not making any advance commitment on the rate trajectory.

Will the EUR/JPY Short Endure Two Central Bank Meetings?

Based on Brandt's chart, the pair traded in a sideways pattern until early 2026, then dropped below a range support near 180. Investing.com data indicate it has remained under that threshold since late September.

Brandt did not provide any reasoning in his post apart from the chart pattern. The ECB is set to make a decision on October 29, followed by the BOJ on October 30.

This is currently my trading company's largest futures/FX position
Short the pair pic.twitter.com/urF5KZRcpl

— The Factor Report (@PeterLBrandt) October 23, 2026

If the BOJ hikes, that would support the short position. Conversely, an ECB hike or a BOJ hold with a dovish tone could challenge it.

Satsuki Katayama, the finance minister, has described a weak yen as a problem. Following the July action, Treasury Secretary Scott Bessent stated that the US would not be reluctant to take part in further intervention. That might link the yen's trajectory to decisions in Washington and Tokyo as much as to the BOJ.