Japanese Retail Investors Increase Short Positions Amid Yen Rebound

Deep Tide TechFlow reports that on September 9, Japanese retail investors remain bearish on the yen despite its strong rebound. Even though the yen has climbed to multi-month highs, retail investors are still increasing their short positions on the currency. According to data from the Japan Financial Futures Association and the Tokyo Financial Exchange, Japanese retail investors held approximately ¥3.61 trillion (equivalent to $23.5 billion) in net short yen positions last week, an increase compared to August. In July, yen short bets reached ¥4.41 trillion, the highest level since 2015. Japanese retail investors have long adhered to a contrarian strategy: selling when the yen appreciates and buying when it depreciates. This stands in stark contrast to foreign investors, who are rushing to unwind yen carry trade positions as the yen surges. Hedge funds are also betting on further yen strength, with some funds even predicting that the USD/JPY exchange rate will fall below 150 by the end of the year. Masayuki Nakajima, Senior Strategist at Mizuho Bank, stated: "If the yen continues to appreciate, these retail investors may eventually be forced to close their long dollar positions." This, in turn, could amplify the yen's rally due to stop-loss dollar selling. (Jin10)