Hedge funds slashed their bets on a stronger yen after the Bank of Japan held back from providing markets with definitive vows for higher interest rates. Leveraged traders held about ¥55.9 billion ($355 million) tied to bullish wagers on the yen in the week ended Sept. 22, according to Commodity Futures Trading Commission data released on Friday and compiled by Bloomberg. That is a nearly 80% reduction compared to a week earlier, when those funds turned positive on the yen for the first time since mid-2025.

Even though the BOJ raised rates on Sept. 17 as expected, the central bank didn’t sound aggressive enough to traders, leading the yen to slip. The interest-rate gap between Japan and the US remains vast. Local markets were closed in Japan for public holidays at the beginning of this week.

On Friday, the yen strengthened as much as 1.2% to 156.94 per dollar after Japanese officials discussed the problems tied to a weak currency in meetings with their US counterparts. Meanwhile, speculative traders, including asset managers and non-commercial players, more than tripled to their positive stance on the dollar in the period ending Sept. 22. The dollar wrapped its best two-week stretch in six months.