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Hedge Funds Thought They Had the Yen Worked Out. They Were Wrong

  • Speculators lifted wagers on currency gains to 4-year high
  • Bank of Japan negative rate prompts biggest yen dive in a year
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Hedge funds that thought a stronger yen was their ticket to big gains underestimated just how quickly the Bank of Japan would prove them wrong.

Speculators boosted wagers on yen strength to the highest since 2012 this week, just days before the central bank’s monetary policy decision sent the currency tumbling Friday by the most in a year. Japan’s currency slid against all of its 16 major peers, and erased this year’s gains versus the dollar.