Hedge funds have net bearish on the Japanese yen for the first time in nearly four months, ahead of a Sunday’s upper house election, which saw Japan’s ruling coalition lose its majority, according to a report by Bloomberg citing data from the Commodity Futures Trading Commission.
CFTC figures for the week ending 15 July showed that speculative traders in currency derivatives held about $1.1bn in net short positions on the yen — approximately 12,600 contracts — marking the first negative positioning since late March and signalling growing investor anxiety over Japan’s political and fiscal outlook.
The reversal comes amid a slide in the yen, which has weakened 3% in July, erasing part of its double-digit gain from earlier this year. Hedge fund strategists are watching closely as Prime Minister Shigeru Ishiba’s Liberal Democratic Party (LDP) risks further political erosion.
