Hedge funds have significantly reduced their short positions on the Japanese yen, cutting their bearish bets by nearly half since the US and Japan conducted a joint intervention to support the currency. This marks a notable shift in sentiment, with investors scaling back negative wagers against the yen.

Data from the Commodity Futures Trading Commission revealed that leveraged funds, a category that includes hedge funds, halved their net short yen positions to 14,850 contracts in the week ended April 16. This is a substantial decrease from the 29,297 contracts recorded the previous week, indicating a considerable reduction in bearish sentiment.

The intervention, the first of its kind since 2000, aimed to curb the yen's rapid depreciation against the dollar. The currency had fallen to a 34-year low of around 154 per dollar before the joint action by the US Treasury and the Bank of Japan.