Hedge funds have shifted to a net bullish position on the yen for the first time since mid-2025, according to data from the US Commodity Futures Trading Commission (CFTC), marking a significant change in positioning, according to a report by Bloomberg.
The switch came after Japanese and US authorities recently intervened to support the currency and saw leveraged funds move from a net short position of 53,255 yen futures contracts to a net long position of 20,069 contracts in the week to the end of 15 September 15, according to CFTC data. Bloomberg calculations put the value of their yen-linked bullish positions at about JPY251bn ($1.6bn).
The change in positioning came just before both the Bank of Japan and the Federal Reserve raised interest rates, and leaves hedge funds exposed to a potentially different market backdrop after the BOJ provided less guidance on the pace of future tightening than some investors had anticipated.
The yen fell as much as 1.3% against the dollar on Friday, subsequently recovering some ground to trade around JPY156.80 per dollar. The move came after the BOJ raised rates, while a report that Japanese officials had conducted a so-called rate check with market participants fuelled speculation that authorities remain prepared to intervene in foreign-exchange markets.
For macro hedge funds and other leveraged currency traders, the reversal in positioning is particularly notable given the scale of the yen’s moves this year. The currency had fallen to around ¥164 per dollar in July before coordinated intervention by Japan and the US helped trigger a substantial recovery.
The latest CFTC figures provide a snapshot of how leveraged funds and asset managers are using derivatives to position for movements in the world’s major currencies. The broader foreign-exchange market has also seen changes in dollar positioning, with speculative traders reducing their net bullish exposure to the US currency to its lowest level since March as of September 15.
Asset managers increased their net long yen position by 54,179 contracts during the week, taking their overall position to 54,821 contracts. The shift suggests the more positive yen positioning was not confined to leveraged hedge funds.
Elsewhere, leveraged funds increased their net short euro position by 4,974 contracts to 51,355 and reduced their net long sterling exposure by 21,663 contracts to 18,698. They also increased their net long Australian dollar position by 10,920 contracts to 59,299.
The yen positioning shift comes as traders assess whether the BOJ will continue raising rates. Governor Kazuo Ueda indicated that the central bank’s policy debate had entered a new phase following its latest increase, but gave limited indication of the timing of another move.
