Net short yen position of leveraged funds narrows as carries unwind By Reuters

By Saqib Iqbal Ahmed

NEW YORK (Reuters) – Leveraged funds’ position in the Japanese yen fell to the smallest net short position since February 2023 in the past week, U.S. Futures Trading Commission and LSEG data showed on Friday.

The net position for leveraged funds – typically hedge funds and various types of money managers, including commodity trading advisors (CTAs) – was short 24,158 contracts, compared to a net short position of about 70,000 contracts in the previous week, dates from August. 6 shown.

This is the biggest change in the weekly net yen positioning of leveraged funds since March 2011, LSEG data showed.

“This week marked the culmination of the biggest short yen rally in 17 years, with leveraged funds and other speculators unwinding bets against the currency at the fastest monthly pace since August 2007,” said Karl Schamotta , chief market strategist at payments company Corpay.

“To paraphrase Mike Tyson, everybody has a plan until the yen punches them in the mouth,” he said, referring to the American boxer.

Global stock and bond markets, particularly those in Japan, were rocked this week by a resurgence in trading in the wildly popular yen.

That trade, which involves borrowing yen at a low cost to invest in other currencies and assets that offer higher returns, is being destroyed by rate hikes in Japan, a volatile yen and looming rate cuts in the United States and other economies.

The US dollar has fallen 9% against the yen over the past month.