CFTC data showing an increase in speculative traders' net yen buying has prompted speculation that it contributed to the yen's appreciation in September. The relationship between the post-intervention price action and the 120-day MA, along with remarks by Treasury Secretary Bessent, has been cited as background, while the rate check in the low ¥158s has also been discussed in connection with these developments.
CFTC statistics show that net yen buying, led by hedge funds, expanded significantly, with speculative traders' net long yen position reaching 120,000 contracts as of September. Against this backdrop, USD/JPY briefly fell to ¥152, prompting suggestions that the situation surrounding the yen's seemingly impregnable floor below ¥155 may have changed.
After the coordinated intervention, net yen selling contracted and the market went through a process of shifting back to net yen buying. In September, however, momentum toward a renewed shift from yen selling to yen buying strengthened. The relationship with the 120-day moving average (MA) has also become an important factor.
The 120-day MA is regarded as the break-even level for hedge funds. After the coordinated intervention, the dollar rebounded quickly even when it fell below the MA, but in September USD/JPY declined to levels well below it, reflecting a weaker dollar and stronger yen. This has been viewed as a factor justifying the intensification of yen buying.
Some observers have suggested that hedge funds' more aggressive yen buying may have been coordinated with Bessent's strategy. Remarks by Treasury Secretary Bessent strengthened expectations of yen appreciation, prompting speculation that hedge funds may have increased their yen buying.
The rate-check observations around ¥158 have also been interpreted as possibly aimed at helping hedge funds avoid turning losses on yen-buying positions into realized losses. As of 18 September, the 120-day MA was reportedly ¥159.4, and some observers said the risk of losses would increase if USD/JPY moved above that level.