Leveraged funds and asset managers have raised combined Japanese yen (JPY) short positions to $11 billion, the highest level since July 2024.
This suggests that investors are betting against the currency despite Japan’s intervention. Short exposure has now climbed for three straight weeks.
Tokyo Spends Massive Sum to Slow the Yen Slide
Short positioning added $5 billion over the three-week stretch. The data points to expectations of further weakness.
The bearish sentiment comes despite Japan’s efforts. The yen’s decline pushed Tokyo to step in recently. The currency slipped past 160 per dollar in late April, the same level that prompted record dollar-selling intervention in 2024.
Between late April and late May, authorities deployed 11.73 trillion yen, or about $73.6 billion. The sum set a record for any month-long stretch and topped the 9.79 trillion yen spent in 2024.
The move worked briefly. On April 30, the yen swung from 160.725, a near two-year low, to 155.50. It moved toward 155 by May 6 before resuming its slide.
The relief faded fast. The yen weakened back toward 160 in early June, pressured further by the Middle East conflict.
Follow us on X to get the latest news as it happens
Rate Gap Keeps Pressure on the Currency
The Kobeissi Letter explained that the wide interest rate gap between Japan and the United States remains the main structural driver. The Bank of Japan holds its policy rate at 0.75%, far below US levels.
That differential rewards traders who borrow cheap yen to buy higher-yielding assets. This strategy, known as the carry trade, has weighed on the yen for years. When those positions unwind, investors often reduce risk exposure, a dynamic that could pressure assets such as Bitcoin (BTC).
Finance Minister Satsuki Katayama signaled that authorities remain prepared to act.
“As for foreign exchange, we continue to maintain our stance that we stand ready to take appropriate action at any time, as needed,” Katayama said.
The Bank of Japan meets on June 16 and may raise its rate to 1%. A hike could narrow the gap and test the conviction behind the record short position.
Subscribe to our YouTube channel to watch leaders and journalists provide expert insights
The post Institutional Investors Drive Yen Short Bets to Highest Level Since 2024 appeared first on BeInCrypto.