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Hedge funds up bearish yen bets to highest level in 19 months

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Hedge funds upped bearish bets on the yen last week to the highest level seen since April 2022 on the back of growing speculation that the currency’s recent rebound will be short-lived, according to a report by Bloomberg.

The report cites data from the Commodity Futures Trading Commission as showing that leveraged funds’ net yen shorts increased by 2,833 to 65,611 contracts as of 28 November, after Japan’s currency put on almost 4% from a recent low of 151.91 per dollar on 13 November to 146.23 on Monday, its strongest showing since mid-September.

Despite overnight-indexed swaps pricing in an end to the Bank of Japan’s negative-rate policy by June, the increase in short bets indicate that investors see weakness in the yen becoming more entrenched. Currency hedging by Japanese life insurers meanwhile, has recently been cut by the most in more than a decade signalling a decline in concerns over a prolonged rebound in the currency impacting returns from overseas assets.


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