Hedge funds turned net long the yen for the first time since 2021

Hedge funds have turned bullish on the yen for the first time since 2021, after big swings in the foreign exchange market led to a surge in a popular yen trade. Leveraged funds hold about $7 million worth of 86 contracts betting that the yen will appreciate, according to the latest data from the U.S. Commodity Futures Trading Commission (CFTC) for the week ending Aug. 13, and speculators in general are bracing for a rise in the yen, marking a sharp shift from the extremely negative sentiment traders had seen in early July. A week ago speculative traders held about 20,000 contracts betting on a weaker yen. These traders have been reducing short bets since early July. The yen has gained about 9 percent against the dollar since early July, outperforming all other G10 currencies.