Hedge funds pared bets against the yen in spectacular fashion after a suspected double-whammy market intervention from Japanese authorities to bolster the currency.
Leveraged funds reduced net short positions on the yen by 38,025 contracts during the week to July 16 — the most since March 2011, Commodity Futures Trading Commission (CFTC) data showed.
While they’re still bearish to the tune of a net 76,588 contracts, the shift coincides with an improvement in sentiment for the yen, which has last week rebounded to the highest level versus the dollar since early June. Hedge funds pulled back during what was a turbulent trading week, with Japan estimated to have spent ¥5.64 trillion ($35.8 billion) over two sessions to lift the yen from near its weakest levels since the 1980s.
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