Institutional investors are aggressively shorting the Japanese Yen even as Japan is attempting to intervene:
Combined Yen short positions held by leveraged funds and asset managers are up to -$11 billion, the highest since July 2024.
We have now seen 3 consecutive weekly increases in short exposure, totaling -$5 billion.
This comes despite Japan’s Ministry of Finance spending a record ~$74 billion over the past month to defend the currency from weakening.
However, the Yen has weakened to ~160 per US Dollar from ~155 in early May and is approaching the critical 160 threshold again.
This reflects the wide interest rate gap between Japan and the US, which remains the primary structural pressure on the currency.
Institutional positioning continues to signal further Yen weakness.