Citigroup is waiting for Japanese buyers to re-enter the bond market and believes that after that, the yen still has a significant room for appreciation.

The strongest three-day rally for the Japanese yen since August 2024 is still not enough to make Citigroup strategist Daniel Tobon bullish on the yen. He stated that in order for the rally to continue, Japanese buyers need to once again start moving funds back into the domestic bond market. "The biggest trading opportunity is waiting for that turning point, waiting for the moment we see that inflection point," he said in an interview. "Once you see that confirmation signal, the yen may have over 15% more upside potential."