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Hedge funds are ramping up bearish bets on the Japanese yen:
Leveraged funds raised net yen shorts by +35,624 contracts in the week ending January 13th, the largest weekly increase since May 2015.
This marks the first jump in bearish positioning over the last 5 weeks.
As a result, net short positions jumped to -100,000 contracts, the most bearish since Q1 2024.
This comes as investor expectations are growing that Prime Minister Takaichi will win the snap election and pursue more fiscal stimulus, further widening Japan's deficit.
Meanwhile, the Yen is trading at 158 against the US Dollar, near its lowest since July 2024.
The currency is approaching 160, the threshold where the Japanese Ministry of Finance last intervened to defend it.
Hedge funds are betting heavily against the yen.