It’s a fascinating game playing out in USDJPY now, with the big question: at what point will speculators get margined out of their long positions? What price point would it take on the downside to tip 50.001% of the specs short positions onto a margin call? The battle lines between the Bank of Japan and speculators is probably going to be drawn somewhere below 80.00, would be my guess. What we need to be mindful of in this, what traders call a “squeeze”, is that this is not “a zero sum game”, as it would be in cotton, or corn, where the supply is finite. The “shorts’ in this market, presumably the BOJ, do have some influence on the supply of currency, and do exert influence on the primary dealers of securities worldwide. The majority of the long on the other hand are speculators who have no influence other than exiting their positions, or putting on more long positions. And I’m also guessing there are a new crop of shorts strung out, based on the amount of e-mails I’ve been getting in my “junk” folder nearly every day for the past 3 months from a hedge fund trader turned internet marketer who is convinced fortunes will be made shorting the yen — buying USDJPY — because, among other things, hedge funds have already bet fortunes on the same trade.