The current market dynamics have prompted hedge funds and asset managers to heavily increase their positions in the Japanese Yen, reflecting a growing bullish sentiment. Leveraged funds are now holding their most bullish yen positions since early 2021, while asset managers are recording their highest long positions ever. This trend is influenced by global economic worries, particularly U.S. tariffs, and rising geopolitical tensions between the U.S. and China, which heighten the yen's status as a safe-haven asset. Diverging policy stances from the Bank of Japan and the Federal Reserve further stimulate yen investments amid risk aversion.
This shift in sentiment comes as U.S. tariffs raise concerns over global economic stability.
Heightened tensions between the U.S. and China continue to reinforce the yen's appeal as a defensive asset.
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