Hedge funds are reportedly maintaining net long yen positions against the US dollar, with CFTC data showing that net long yen positions had expanded as of 6 October. Possible coordination between Japanese and US authorities to correct the yen's weakness has been pointed out.
Net buying of the yen against the US dollar is reportedly expanding. CFTC data showed that net long yen positions stood at 62,000 contracts as of 6 October, a modest increase from a week earlier. Net long yen positions are considered unusual among the major currencies.
Net long US dollar positions across the 5 major currencies stood at 323,000 contracts, while the other 4 currencies increased their net short positions against the US dollar. As a result, the movement to buy yen against the US dollar is described as standing out.
Net short positions in the euro, sterling, Canadian dollar and Australian dollar against the US dollar expanded sharply to more than 90,000 contracts, led by sterling and the Australian dollar. The rise in global long-term interest rates since September may have been a factor behind buying of the US dollar.
The yen shifted from net selling to net buying after September and at times approached the ¥170 range. As Japanese and US monetary authorities seek yen appreciation, hedge funds regarded as being aligned with Secretary Bessent are advancing yen buying, prompting speculation about possible coordination between the two sides. The hedge funds' break-even point is said to be benchmarked to the 120-day moving average of the US dollar-yen exchange rate, and their activity is drawing attention in light of the current level of around ¥159.