Hedge funds turned positive on the yen for the first time since July 2025, a noteworthy shift weeks after US and Japanese authorities intervened to support the currency.

Leveraged traders wiped out bets against the yen in the week ending Sept. 15 and began building wagers on a stronger currency, CFTC data released Friday show. Funds held about ¥251 billion ($1.6 billion) tied to bets the yen will strengthen, according to Bloomberg.

The pivot came before the Federal Reserve and Bank of Japan lifted interest rates this week. It stands to catch traders wrongfooted after Japanese policymakers disappointed some hoping for clearer signs the BOJ would keep raising rates. The yen fell as much as 1.3% on Friday before paring declines to around 156.80 per dollar late in New York. The Nikkei reported the BOJ inquired with market participants about exchange-rate levels, a step often seen as a precursor to official intervention.

CFTC figures offer a glimpse into sentiment in the $9.5-trillion-a-day foreign-exchange market, showing how hedge funds and asset managers are positioned using derivatives. Meanwhile, speculative traders pared back their positive stance on the dollar as of Sept. 15 to the lowest since March. The US currency surged this week by the most in three months.