Yen Sentiment Turns

Hedge funds have significantly reduced their short bets on the yen since the joint intervention by the US and Japan. According to Commodity Futures Trading Commission (CFTC) data, contracts tied to leveraged funds' short bets on the yen declined 6.5% to 59,526 in the week ended Aug 11.

This marks a more than halved reduction in negative sentiment towards the Japanese currency since the intervention at the turn of the month. The yen weakened about 1% this week to trade at 159.35 late in Friday's New York trading session.

Paresh Upadhyaya, a strategist at Pioneer Investments, noted that investors are trimming their positions due to growing risks. 'With the market caught offside with large short yen positioning, it's only natural for investors to trim their positions,' he said.