CNY Weakens
If CNY weakens to say CNY/JPY 16.38, the trader might close their position and cut their losses by selling CNY 10 million against JPY at the average rate of 16.38. The trader's net loss is as follows:
JPY 16.44 - JPY 16.38 = - JPY 0.06
-JPY 0.06 x CNY 10,000,000 = -JPY 600,000
In this trading session, the trader bought high and sold low, thus making a loss.