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Hedge funds up bets against the yen as negative rate-regime ends

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Hedge funds upped their bets against the yen last month during the week the Bank of Japan announced its decision to up interest rates and bring an end to the world’s last remaining negative-rate regime, according to a report by Bloomberg.

The report cites data from the Commodity Futures Trading Commission as revealing that leveraged speculators ramped up their wagers that the currency would fall, to 80,805 during the week ending 19 March, near the six-year high of 83,562 seen earlier last month.

The BoJ’s pledge to adopt an “accommodative stance” to rate increases saw the yen fall to 2024 lows losing more than 1% against the US dollar following the central bank’s meeting on Tuesday, with a second weekly fall now widely anticipated.

According to the CFTC, hedge funds have been consistently short the yen since 2021, with the trade remaining popular in recent months on expectations that the BOJ’s will adopt a dovish stance in its pursuit of policy normalisation.

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