Hedge funds pare bullish yen bets after BOJ rate move

Hedge funds sharply reduced bullish bets on the Japanese yen after the Bank of Japan raised interest rates on Sept. 17 but provided limited indication of further tightening. Commodity Futures Trading Commission data for the week to Sept. 22 show leveraged funds’ net long position fell about 80% to the equivalent of JPY55.9 billion ($355 million).

Leveraged funds cut their net yen position by 15,598 contracts to 4,472, while asset managers trimmed their net long exposure by 12,323 contracts to 42,498, according to the CFTC reporting week ending Sept. 22.

The yen weakened after the BOJ decision, trading around JPY157.39 per dollar by the Sept. 22 reporting date, down from roughly JPY155.11 a week earlier. On Sept. 25 the currency strengthened as much as 1.2% to JPY156.94 per dollar after Japanese officials expressed concern about yen weakness during discussions with U.S. counterparts.

Market commentary noted that BOJ guidance did not make a clear case for a rapid series of follow-up hikes. The gap between Japanese and U.S. interest rates remains wide and continues to affect carry trades and flows into dollar positions.

The prior week had seen hedge funds move to a net bullish yen position for the first time since mid-2025. The CFTC reports capture positions held by leveraged funds, which include hedge funds and other speculators, and by asset managers, which typically represent longer-term institutional investors.

Traders, funds and officials will continue to monitor BOJ communications, U.S. monetary policy cues and diplomatic discussions for signals on future currency positioning. Weekly CFTC data will remain a primary source for tracking how speculative and institutional investors adjust yen exposures.