Peter Brandt's Biggest Bet Right Now Is a Short on the Euro, and the Yen Is Doing the Work
Peter Brandt says a EUR/JPY short is his firm's largest futures and currency position. The pair has slid from an April high near 187.5 to about 175.65, even though euro deposits still pay double what Japan's do. The real story is whether the BOJ and Tokyo's intervention threat can keep the yen bid.
Peter Brandt says his firm's single largest futures and currency position right now is a short on EUR/JPY. That's a notable admission from a trader with a four-decade track record, and it lands at a moment when the yen has quietly turned from whipping boy into the trade everyone wants to be on.
The slide from 187.5
Start with the price. EUR/JPY, the number of yen one euro buys, peaked near 187.5 back in April. That was the top of a multi-year grind higher, the kind of chart that had momentum funds piling into euro longs and yen shorts because the carry math was too easy to ignore.
Then it turned. Futures on the pair sat at 175.65 on Brandt's chart when he posted his position on X. That's roughly 12 big figures off the high, a little under 7%, and it happened while most macro desks were still talking about yen weakness as a permanent condition.
What changed is the Bank of Japan. The BOJ spent years at negative rates and then started moving. Policy rates are at 1.25% now, up from below zero, and every hike has chipped away at the one thing that made shorting the yen so comfortable: a wide, stable rate gap. The European Central Bank pays 2.5% on deposits. That spread has narrowed in Japan's favor, granted, but it's still 125 basis points in the euro's corner.
So the carry trade still pays you to be long euro. Brandt is short anyway.
Why the chart guys are winning
This is where it gets interesting. Germany's rates are double Japan's, and yet the euro is falling against the yen. That's not a rate-differential trade at all. It's a trend trade, and Brandt has never pretended otherwise.
The people who got hurt here are the systematic carry funds that lean on spreads and ignore price. They've been collecting small premiums for months and giving it back in a hurry every time the BOJ hints at another move. The ones who watched the 187.5 failure and shorted the retest are the ones posting screenshots.
The question worth asking: how much of the yen's move is already in the price? A 7% slide in seven months is real, but EUR/JPY at 175 is still historically elevated. This isn't a weak yen anymore. It's a slightly less absurd one.
What to watch
The next catalyst is the BOJ's policy decision, and the market is already leaning toward another hike. Watch the language, not just the number. Any hint that the board is pausing would snap the yen back fast, and Brandt's position would feel it.
The second catalyst is Tokyo itself. Japan's Ministry of Finance has a long history of stepping into the market when the yen moves too fast, and US Treasury officials have been unusually vocal about wanting a stronger yen. Coordinated intervention talk is the kind of thing that makes short-yen carry traders nervous even when the spread says otherwise.
On the levels, 170 is the first shelf to watch. A clean break there opens the door to 165, and that's where the April lows start to matter. On the other side, a daily close back above 180 would tell you the trend has stalled and the carry crowd is back in charge.
Color me skeptical, but I don't think rate differentials alone get the yen much further. The spread is still too wide. History suggests otherwise, though, when price and policy point the same direction, and right now they do. Brandt isn't betting on the BOJ's spreadsheet. He's betting on the chart, and the chart has been telling the same story since April.
