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Trend followers to benefit from bearish US bond and yen trades

Hedge funds using computer algorithms to trade market trends are set to benefit from recent falls in US government bonds and the value of the yen to trade market trends, having ended August with bearish positions in both assets, according to a report by Reuters.

The report cites a JPMorgan client note as showing that so-called commodity trading advisors (CTAs), which use computers to catch price movements, held strong net short positions in the yen and US and European government bonds as of 29 August, as well as smaller net bearish position in Hong Kong stocks.

The yen hit a 10-month low against the dollar at around 147.82 on Wednesday, having fallen by 1% since late August.

The 10-year US Treasury yield meanwhile, is up 15 basis points to 4.25%, extending recent price losses.

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