Hedge funds go net long on yen for first time since mid-2025

Hedge funds shifted from a 53,255-contract net short to a 20,069-contract net long on the Japanese yen in the week to Sept. 15, according to Commodity Futures Trading Commission data. Bloomberg-style calculations put the leveraged funds’ yen-linked bullish exposure at about JPY251 billion ($1.6 billion).

The repositioning by leveraged currency traders took place over a single reporting week and followed recent joint action by Japanese and U.S. authorities to support the currency. The change in positioning came just before both the Bank of Japan and the Federal Reserve raised interest rates.

The Bank of Japan raised its policy rate and a report that Japanese officials conducted a so-called rate check with market participants added to speculation that authorities remain prepared to act in foreign-exchange markets. The yen fell as much as 1.3% against the dollar on Friday before recovering to trade near JPY156.80 per dollar.

CFTC figures show asset managers also increased their net long yen position, adding 54,179 contracts in the week to reach a net long of 54,821 contracts. Leveraged funds increased their net short position in the euro by 4,974 contracts to 51,355, reduced net long sterling exposure by 21,663 contracts to 18,698, and added 10,920 contracts to lift their net long Australian dollar position to 59,299 contracts.

Speculative traders cut their net bullish exposure to the U.S. dollar to the lowest level since March as of Sept. 15, according to the same reporting period.

Bank of Japan Governor Kazuo Ueda described the central bank’s policy debate as having “entered a new phase” after the latest rate increase, while offering limited guidance on the timing of further moves. Officials and market participants are monitoring policy signals from the BOJ for the pace of future hikes and the possibility of further FX intervention.

The yen has swung widely this year, falling to about JPY164 per dollar in July before coordinated intervention by Japanese and U.S. authorities helped trigger a recovery. Traders are adjusting positions in derivatives and cash foreign-exchange markets to reflect recent rate increases and official actions.