Hedge Funds That Are Short Dollar-Yen Stare Down Fiscal Year Squeeze
- Leveraged short bets surge amid global, domestic turmoil
- Failure to slide past 104.50 seen as key signal of support
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Just as hedge funds pile into wagers betting on dollar-yen weakness, signs are emerging that the pair is poised for a resurgence in Japan’s new fiscal year.
The greenback’s failure to break below 104.50, seen by major Japanese banks as a key barrier amid a congestion of buy orders, is pointing to a potential bottom for the widely traded cross. That’s bad news for speculators that suddenly turned bearish for the first time in almost a year this month as an escalation in global trade tension and a domestic political scandal spurred demand for Japan’s haven currency.