Speculators turn bullish on yen for first time since February

Speculative traders have turned net long on the Japanese yen for the first time since February, reflecting a significant shift in market sentiment driven by growing expectations for faster Bank of Japan interest rate hikes and potential Japanese asset repatriation. According to recent Commodity Futures Trading Commission (CFTC) data, net non-commercial positions in yen futures reached 10,796 long contracts in the week ending September 8, marking the first overall net long posture since February 24. This turnaround represents a rapid reversal from the prior week's net short positioning of 92,227 contracts, indicating a swing of over 100,000 contracts in a single week. The aggressive repositioning helped propel the yen to 152.89 per U.S. dollar on September 8, reaching its strongest level since mid-February and rebounding from multi-decade lows of 163.99 reached earlier in July. The swift adjustment in speculative positioning underscores easing bearish pressure on the yen, which had previously suffered from dovish fiscal leadership and central bank divergence. With joint Tokyo and Washington market interventions and evolving BOJ monetary tightening expectations, currency markets may see sustained upward momentum in the yen against the greenback.