Speculators Unwind Crowded Yen Defensive Trade
Speculators unwound part of a crowded yen defensive trade, with hedge funds having built more than 170K net long contracts over four weeks. In the week ended 22 September, net longs were cut by nearly 48.4K contracts, the sharpest reduction since August, leaving positioning still elevated after a rapid run-up.
Net speculative longs fell to almost 72K contracts from over 120.3K the previous week, while speculative exposure eased from 22.2% to 19.0%. Even so, the Net Position Percentile stood at 88.1 and the Speculative Exposure Percentile at 85.0, and net positioning was still up by more than 135K contracts over the past month. The reporting week included 25 basis point rate rises from both the Fed and the BoJ, alongside a pause in US Treasury yields and a retreat in oil prices; together, these shifts reduced the immediate bid for safe-haven and funding-currency positioning without overturning the broader macro backdrop.
