5 weeks saw a reduction of 74,000 contracts, hedge funds cut yen short positions after Japan's FX intervention

Odaily News: The Kobeissi Letter stated on Platform X that, according to CFTC data, in the five weeks ending August 4, leveraged funds significantly reduced their yen short positions, with net short contracts dropping by 74,400 to 63,600—one of the largest short-covering adjustments since the 2008 financial crisis. Earlier, at the end of June, leveraged funds held approximately 138,000 net short yen contracts, the highest level since 2007.

Additionally, amid market adjustments, the Japanese government bought approximately $85 billion worth of yen on July 30-31 to support the currency, marking the largest two-day FX intervention since the 2011 Fukushima nuclear accident and the first coordinated intervention between Japan and the U.S. in 15 years. This came after the yen had previously fallen to its lowest level since 1986.