Hedge funds turn bullish on yen for first time since July 2025, CFTC data show

Commodity Futures Trading Commission (CFTC) data reveals that hedge funds and leveraged funds turned net long on the Japanese yen for the first time since July 2025. In the week ending September 15, leveraged funds flipped their positioning from roughly 53,000 short contracts to a net long position of approximately 20,000 contracts, representing about 250 billion yen (1.6 billion USD) in bullish bets. Concurrently, institutional asset managers boosted their net yen long exposure by 54,000 contracts to around 55,000 contracts, while broader speculative traders trimmed bullish US dollar positioning to six-month lows. However, the sudden bullish shift presents significant near-term squeeze risks for traders. Following the CFTC cutoff date, both the Federal Reserve and the Bank of Japan implemented interest rate hikes, but lack of aggressive forward guidance from Japanese policymakers sparked a 1.3% Friday sell-off in the yen, sending USD/JPY towards the 158 mark before settling near 157. With Japanese markets facing holiday liquidity constraints, traders face two-way volatility amplified by reports of potential BOJ exchange rate checks.