Hedge Funds Turn Net Long Yen for First Time Since 2021
Hedge funds have turned bearish on the yen for the first time since 2021, after sharp volatility in the foreign exchange market led to a surge in a popular yen trade. According to the latest data from the U.S. Commodity Futures Trading Commission (CFTC) for the week ending Aug. 13, leveraged funds held 86 contracts worth about $7 million betting that the yen would strengthen, as speculators in general braced for a rise in the yen, marking a sharp turnaround from the extreme negativity that traders saw in early July. A week ago speculative traders held about 20,000 contracts betting on a weaker yen. These traders have been reducing their short bets since early July. Since the beginning of July, the yen has gained about 9% against the dollar, outperforming all other G10 currencies.
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