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Open interest in JPY futures markets shrunk by around 1.1K contracts on Monday, recording the second consecutive drop according to flash data from CME Group. Volume, instead, rose by nearly 21K contracts, resuming the upside and reversing the previous drop.

USD/JPY could attempt a rebound near term

USD/JPY continues to correct lower on Tuesday, although the ongoing appreciation of the yen was on the back of shrinking open interest, noting some short covering behind the move. That said, while a test of the 108.00 neighbourhood should not be ruled out in the near term, a probable rebound has also emerged on the horizon.