Yen Bulls Emerge After Months of Weakness

Speculative investors have turned bullish on the yen for the first time since February, according to data from the Commodity Futures Trading Commission (CFTC). The shift marks a significant reversal in sentiment, with net non-commercial positions in yen futures reaching 10,796 long contracts in the week through September 8. This represents the first overall net long position since February 24.

The yen has strengthened sharply this month, supported by expectations that the Bank of Japan could accelerate its rate-hike schedule and speculation that Japanese investors may repatriate assets held overseas. The currency reached 152.89 against the U.S. dollar on September 8, its strongest level since February 17.

The latest rally follows years of weakness for the Japanese currency. Its decline accelerated after fiscal dove Sanae Takaichi became prime minister last October, alongside concerns that the BOJ was falling behind other central banks in tightening monetary policy. The pressures pushed the yen to a four-decade low of 163.99 per dollar in July.