#ena According to the U.S. Commodity Futures Trading Commission (CFTC), hedge funds reduced their net long position in yen by 12,183 contracts — the largest decline this year. At the same time, asset managers increased their bullish bets on the yen by 3,218 contracts over the same period, Bloomberg reports.
Last week, the yen started trading near a monthly high but quickly gave back some gains amid measures by Japanese authorities to contain the plunge in the bond market. The lack of clarity regarding the direction of the dollar is also confusing currency market participants as the legal dispute surrounding Donald Trump's tariffs adds volatility to the dollar's exchange rate.
On Monday, the yen extended its three-day rally as escalating trade tensions increased demand for safe-haven currency. The yen rose by 0.3% to 143.54 per dollar after Trump announced plans to double tariffs on steel and aluminum and accused China of violating agreements to reduce them.
"The yen is strengthening at the start of a new week as the market tries to understand the implications of the latest news on steel tariffs and progress in trade talks between the US and Japan," noted Rodrigo Catril, a strategist at the National Australia Bank.
