BofA Survey: Global Fund Managers’ Bearish Sentiment on Yen Reaches Highest Since 2022

According to a survey by Bank of America, global portfolio managers' bearish sentiment on the yen has risen to its highest level in approximately four years, as risks surrounding Japan's fiscal and monetary policy outlook overshadow the possibility of government intervention in the foreign exchange market.

“Investor bearishness on the yen is at its highest since 2022, primarily driven by risks related to monetary policy and fiscal policy,” wrote BofA strategists Ralf Preusser, Adarsh Sinha, and others in a report dated July 10. The survey shows that 40% of the responding traders are bearish on the yen due to risks stemming from Japan's fiscal and central bank policies, up from 35% in June. Meanwhile, as the US-Japan interest rate differential narrows, only 10% of respondents were bullish on the yen, down from 12% in June.

Separately, data from the U.S. Commodity Futures Trading Commission (CFTC) shows that as of the end of June, net short yen positions held by speculative leveraged funds reached their highest level since 2007.