Mean Reversion Signals in 6J: When Yen Snaps Back Hard
6J futures trend clean, but when they snap back, they snap hard. Mean reversion in 6J isn’t random; it’s tied to very specific conditions involving liquidity, yields, and failed macro expectations.
1. Failed Breakouts During Tokyo–Singapore Overlap
6J trends hardest during the overlap. When a breakout fails during this window, it's almost always a trapped-flow reversal.
- breakout wick
- instant reclaim of the level
- fast follow-through the other way
If you study 6J structure, you’ll recognize this pattern immediately.
2. U.S. Treasury Yield Snaps
If yields reverse sharply after a CPI or NFP spike, 6J will often mean revert within seconds.
| Yield Move | 6J Reaction |
|---|---|
| Yields rip up then fade | 6J spikes upward |
| Yields dump then bounce | 6J drops |
This ties into your deeper rate-spread breakdown from your yield relationship article.
3. Liquidity Vacuums After News
Huge news candles leave imbalances. When price has no liquidity behind it, it often snaps back to refill the void.
You already covered the logic behind this in your liquidity void article.
4. Failed BOJ Narrative Days
Sometimes markets price in BOJ hawkishness or intervention risk and… nothing happens. When expectations fail, 6J mean reverts violently.
- Yen expectations unwind
- Carry trade resumes
- 6J reverses the entire move
5. Overextended Moves in Dead Zones
Moves during low-liquidity U.S. lunch hours tend to retrace fully once real liquidity returns.
This matches the timing patterns in your lunch liquidity article.
Final Thoughts
Mean reversion in 6J is clean because yen flow is clean. Failed breakouts, yield snaps, liquidity vacuums, and BOJ expectation flips all trigger sharp reversals. Learn these signals and you’ll stop being late on every yen reversal.