CFTC data: hedge funds net long yen for first time since July 2025

The yen longs were built before a week that moved against them, so a position squeeze is a near-term risk if the yen keeps falling, especially with Tokyo closed for Silver Week and liquidity thin. On the flip side, any official action would now meet a market positioned in the opposite direction, potentially amplifying a yen rebound. This leaves USD/JPY with two-way risk near the 157 area in coming sessions. The next weekly positioning report will show whether funds held or cut their yen longs after Friday's move.

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Just ahead of rate hikes by the Federal Reserve and Bank of Japan, hedge funds flipped to net long the yen. A Friday sell-off and a reported BOJ rate check then tested their conviction.

Summary:

• According to Bloomberg, hedge funds became net long the yen for the first time since July 2025, weeks after US and Japanese authorities intervened to support the currency.
• CFTC data indicate that leveraged funds eliminated their bearish yen bets in the week through September 15, holding approximately ¥250 billion ($1.6 billion) in wagers on a stronger currency. Their net position swung to about 20,000 contracts long from roughly 53,000 short.
• Asset managers also added to net yen longs, raising them by around 54,000 contracts to roughly 55,000.
• The shift came just before this week's rate increases by the Fed and BOJ, and may leave traders caught off guard after the BOJ disappointed those expecting clearer signs of more hikes.
• The yen fell as much as 1.3% on Friday before recovering to trade around 157 per dollar late in New York. The Nikkei newspaper reported that the BOJ asked market participants about exchange-rate levels, a step often seen as a precursor to intervention.
• Speculative traders cut their bullish dollar stance to the lowest since March as of September 15, and the dollar posted its largest weekly gain in three months this week.

Per Bloomberg, hedge funds turned positive on the yen for the first time since July 2025, a notable change weeks after US and Japanese officials stepped in to support the currency. Based on CFTC data released Friday, leveraged traders erased their short yen positions in the week through September 15 and began building bets on appreciation. The funds held roughly ¥250 billion ($1.6 billion) in wagers on a stronger yen, according to Bloomberg-compiled data.

The shift was sizeable. Leveraged funds moved to a net long of roughly 20,000 contracts from a net short of about 53,000 in the prior week. Asset managers, the other category tracked, also boosted yen longs, increasing their net long by about 54,000 contracts to roughly 55,000. The CFTC data provide a weekly snapshot of positioning in currency derivatives but lag events by several days.

The timing proved unfavorable for the new yen bulls. The positioning data run through Tuesday, before this week's rate hikes by both the Fed and BOJ. Japanese officials fell short of expectations for stronger signals of further tightening, and the yen dropped up to 1.3% on Friday before paring losses to around 157 per dollar late in New York. The dollar posted its largest weekly gain in three months.

Further complicating matters, the Nikkei reported that the BOJ conducted a rate check with market participants on Friday, a step often seen as a precursor to intervention. The central bank has not confirmed the report.

The CFTC data also revealed other shifts. Speculative traders, including asset managers and non-commercial players, reduced their bullish dollar positioning to the weakest since March. Leveraged funds increased Australian dollar longs by roughly 11,000 contracts to about 59,000, trimmed sterling longs by approximately 22,000 contracts to around 19,000, and raised euro shorts by about 5,000 contracts to roughly 51,000.

The data cutoff preceded the Fed and BOJ decisions and Friday's slide, so it does not show whether funds have since held or reduced their yen longs. That is investingLive's reading of what the numbers can and cannot say. The next weekly report will reveal how positioning responded, and the BOJ's future rate signals and any official action will determine whether the new yen bulls are vindicated or forced to retreat.