Key facts
- Speculators held a net long position of 10,796 contracts on the yen in the week to September 8.
- This marks the first overall long reading for the yen since February 24.
- The yen has surged this month on expectations of accelerated Bank of Japan rate hikes.
- The dollar-yen rate reached 152.89 on September 8, the strongest level since February 17.
Speculators have turned to a net long position on the yen for the first time since February, according to data from the Commodity Futures Trading Commission. In the week ending September 8, net non-commercial positions amounted to 10,796 long contracts, a significant reversal from the net short position of 92,227 contracts held the prior week. This shift indicates growing momentum behind Japan's currency.
The yen has experienced a surge this month, driven by expectations that the Bank of Japan might accelerate its schedule of rate hikes. Additionally, a potential repatriation of assets by local investors is contributing to the yen's strength. The dollar-yen exchange rate reached 152.89 on September 8, marking the strongest level for the currency since February 17.
The dollar index, measuring the greenback against six other units, was steady at 99.15 after two straight weeks of declines. U.S. Treasury yields remained near multi-year highs, with the 2-year yield easing to 4.6148% after rising 26 basis points last week.
Global policymakers are grappling with erratic pricing pressures from the six-month-long U.S.-Israeli war on Iran that has pushed oil prices well above $100 per barrel. Brent crude futures rose nearly 3% to $107.51 per barrel in early Asian trading after new Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf compounded supply concerns.
The European Central Bank raised rates last week and warned of further hikes, setting the stage for the Fed policy decision on Wednesday and a widely expected rate hike from the BOJ on Friday. The Bank of England is expected to stand pat on Thursday, but the voting is likely to be close. Traders ramped up bets for a Fed rate hike after data on Friday showed U.S. consumer prices accelerated in August; they priced in an 86% chance of an increase this week and another move higher later in the year, the CME FedWatch tool showed.