SINGAPORE, May 8 (Reuters) – Speculators retreated from their largest bearish bets on the yen in two years, weekly data from a U.S. regulator showed on Friday, as suspected Japanese interventions worth an estimated $60 billion-plus jolted traders.
Data from the U.S. Commodity Futures Trading Commission showed net short positions in the yen fell to 61,738 contracts in the week ended May 5, down from a near two-year high of 102,059 contracts a week earlier.
Japan intervened in the foreign exchange market during holidays in early May, in addition to yen-buying operations conducted on April 30, a source familiar with the matter told Reuters on Friday.
There has been no confirmation from Japan but officials have been threatening intervention for months. Tokyo is also counting on a hawkish shift at the Bank of Japan that could help slow the embattled currency’s slide.
The yen was last at 156.71 per U.S. dollar, not far from the almost two-year low of 160.725 it hit on April 30, when Tokyo had first stepped in to support the yen, sources told Reuters.
The CFTC data is likely to have captured some but not all of the impact from Tokyo’s actions on speculative positioning as the latest report covers up to Tuesday while the yen spiked suddenly on Wednesday as well.
Rong Ren Goh, a portfolio manager at Eastspring Investments in Singapore, said the moves by Japanese authorities have created a degree of reluctance in the market to challenge the 160–165 area, which for now appears to be viewed as “off-limits”.
“That makes the risk-reward of shorting JPY near these levels much less attractive,” Goh said.
(Reporting by Ankur Banerjee in Singapore; Additional reporting by Karen Brettell in New York; Editing by Andrea Ricci )
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