Hedge Funds Halve Yen Short Positions After US-Japan Intervention

Leveraged funds have more than halved their short positions against the Japanese yen following a historic joint intervention by the Government of Japan and the federal government of the United States to support the currency. Data from the United States Commodity Futures Trading Commission for the week ending August 11 shows that hedge funds reduced their net yen short bets by 6.5% to 59,526 contracts.

Despite the reduction in negative sentiment, the yen weakened approximately 1% to 159.35 by the end of Friday's New York trading session. This decline erased many of the gains achieved through the official intervention. Market participants remain cautious, awaiting further interventions or a hawkish policy shift from the Bank of Japan.

Speculators also adjusted other currency positions during this period. Traders increased bullish bets on the British pound and Mexican peso while raising short bets against the New Zealand dollar.