Yen Speculators Turn Net Long for First Time Since February

Currency speculators are now betting on a stronger Japanese yen for the first time since February, after the currency rallied on expectations that the Bank of Japan will speed up its rate hikes.

Data from the Commodity Futures Trading Commission (CFTC) released late Friday showed net non-commercial positions in yen futures hit 10,796 long contracts in the week through September 8. That is a sharp reversal from net short positions of 92,227 contracts a week earlier. It is the first overall net long position since February 24.

The swing was unusually fast

Net positioning moved by more than 100,000 contracts in a single week, a pace that underlines how quickly sentiment has changed. Speculative investors have moved from betting on further yen weakness to positioning for more gains, with shifting expectations for Japanese monetary policy as the main catalyst.

The yen reached 152.89 against the U.S. dollar on September 8, its strongest level since February 17. The currency has also drawn support from speculation that Japanese investors may bring home assets held overseas, a flow that would lift demand for the yen.

Why the yen had been so weak

The rally follows years of decline for the Japanese currency. Losses accelerated after fiscal dove Sanae Takaichi became prime minister last October, alongside concerns that the BOJ was falling behind other central banks in tightening monetary policy.

Those pressures pushed the yen to a four-decade low of 163.99 per dollar in July. Tokyo and Washington then intervened in the currency markets to support the yen, which helped reverse some of the earlier losses.

From a low of 163.99 in July to 152.89 on September 8, the yen has recovered more than 11 points against the dollar, though the positioning data suggests part of that move is now being reinforced by speculative flows rather than intervention alone.

What it means

A sustained shift out of long dollar positions would matter beyond Tokyo. The yen is a major funding currency, and a faster BOJ tightening cycle narrows the rate gap that has driven money into the dollar for years. For Nigerian businesses and importers, a broadly softer dollar has often eased pressure on the naira, though that depends on whether the yen rally holds and whether other central banks follow the same direction.