Speculators pushed short positions on the yen to a nine‑year peak, with leveraged funds holding more than 115,000 contracts through June 9, the most since November 2017. The currency lingered near 160 per dollar, prompting traders to brace for possible government intervention as the Bank of Japan eyes a rate hike.

The resurgence reflects a revived yen carry trade, where investors borrow cheap yen to chase higher yields elsewhere. Low global volatility and a widening interest‑rate gap with the United States have kept the trade attractive, despite the BOJ’s gradual tightening and past intervention episodes that briefly trimmed short bets.

JPMorgan strategists note that markets have already priced in the BOJ’s likely hike and any FX support, a stark contrast to the surprise moves of two years ago. Yet the trade remains risky; a 2024 rate increase and bond‑purchase cuts sparked a sharp yen rally that forced rapid unwindings, rattling currency and equity markets.