J.P. Morgan: Profit-taking on Swiss Franc/Japanese Yen short positions, Japanese bond yields surge may exacerbate risks.

J.P. Morgan said that as the focus shifts to the term premium of developed market bonds, the two-way risks of the yen are increasing. "We choose to close out our short positions in CHF/JPY, as changes in Japanese government bonds may be seen as exacerbating domestic currency and fiscal risks for the yen, while Switzerland is relatively stable in this respect," said strategists James Nelligan et al in a report.