Traders retreated from record bets on yen weakness last week, in a period that likely included a period of intervention by Japanese officials to support their currency.
Leveraged funds and asset managers now hold a total of about 174,500 contracts tied to bets that the yen will fall in coming weeks, according to the latest data from the Commodity Futures Trading Commission, covering the week through Tuesday. That’s a slight decline from the previous week, when speculative traders held historically high levels of short yen positions.
There was extra focus on this week’s report as a way to gauge how sharply traders had cut their bearish yen positions after Japanese officials likely stepped in to buy the currency on Monday, helping it recover from a 34-year low. The first indication is that the pullback on bearish bets was relatively superficial, although Wednesday’s reporting period did not include a second likely Japanese intervention. It was the first time in more than a month that these traders reduced their short position on the yen.
