Hedge Funds Turn Bullish on Yen Amid Interest Rate Hikes

Hedge funds have turned bullish on the yen for the first time since July 2025, according to data from the Commodity Futures Trading Commission (CFTC). Leveraged traders erased their bets against the yen in the week ending September 15 and began building wagers on a stronger currency. The funds held about ¥250 billion ($1.6 billion) in bets that the yen will strengthen.

The swing was sizeable, with leveraged funds moving to a net long position of roughly 20,000 contracts from a net short of about 53,000 the week before. Asset managers also added to yen longs, raising their net long position by around 54,000 contracts to roughly 55,000.

The timing is awkward for the new bulls, as the positioning data ran through Tuesday, before the Federal Reserve and Bank of Japan both raised interest rates this week. Japanese policymakers disappointed some market participants who had hoped for clearer signs that the central bank would keep raising rates, and the yen fell as much as 1.3% on Friday before paring losses to trade around 157 per dollar late in New York.