Hedge Funds Flipped Long the Yen, Then Sold Again
Key takeaways
- On 30 June 2026, hedge funds held their biggest bet against the yen since June 2007: a Leveraged Funds net short of 137,828 CME contracts.
- In the two weeks to 15 September they bought 131,366 contracts and turned net long. That is the largest two-week swing toward the yen in the CFTC's records, which start in 2006, and the first net long since July 2025.
- It did not last. After the Bank of Japan's 18 September hike, they sold again. By 6 October they were back to a net short of 30,379.
- Asset Managers went the other way and stayed there: from a net short of 80,077 in late July to a net long of 68,749, their largest since December 2025.
- Open interest fell 31% from mid-September. A lot of money left the trade.
The Yen Trade in One Paragraph
For most of 2026, hedge funds were short the yen and the trade was crowded. In early September they reversed it at a speed never seen before in the yen futures data. Then the Bank of Japan raised rates, the yen weakened instead of rallying, and the fast money went back short within three weeks. Pension funds and other asset managers, the slower money, kept their new long. The yen COT report now shows the two big buy-side groups on opposite sides.
All figures come from the CFTC Traders in Financial Futures (TFF) report for CME Japanese yen futures, futures and options combined. Yen futures are quoted in US dollars per yen, so a long yen futures position is a bet on a stronger yen.
From a 19-Year Extreme to a Record Swing
Leveraged Funds (hedge funds and CTAs) and Asset Managers in yen futures:
| Report date | Leveraged Funds net | Asset Managers net | Dealers net | Open interest |
|---|---|---|---|---|
| 30 June 2026 | -137,828 | -64,484 | 144,237 | 492,918 |
| 28 July 2026 | -124,575 | -80,077 | 154,837 | 490,387 |
| 1 September 2026 | -111,297 | -21,729 | 83,396 | 455,490 |
| 8 September 2026 | -53,255 | 642 | -39,447 | 544,208 |
| 15 September 2026 | +20,069 | 54,821 | -169,089 | 581,281 |
| 22 September 2026 | +4,472 | 42,498 | -107,746 | 413,339 |
| 29 September 2026 | -16,809 | 51,961 | -86,239 | 393,884 |
| 6 October 2026 | -30,379 | 68,749 | -82,167 | 401,029 |
The June short was a 19-year extreme. A Leveraged Funds net short of 137,828 had only been beaten in nine weeks of the CFTC's TFF history, all of them in the first half of 2007.
The September swing was the biggest on record. Leveraged Funds bought 131,366 contracts in two weeks. The largest two-week swing toward the yen before that was 77,842, in July 2007. This one was almost 70% bigger.
It ended a 61-week streak. The 15 September report was the first net long for Leveraged Funds since 8 July 2025.
Dealers took the other side. Banks' dealer desks went from net long 154,837 in late July to net short 169,089 on 15 September, the mirror image of the speculative buying.
What Happened Around the Bank of Japan
The flip came just ahead of the Bank of Japan meeting on Friday 18 September 2026. The BOJ raised its policy rate by a quarter point to 1.25%, the highest since 1995. Two of the nine board members voted to hold, and the yen weakened on the decision instead of rallying, as markets read the split vote as a sign that further hikes would be harder to push through.
The positioning data shows how the fast money reacted:
- Before the meeting (report of 15 September), Leveraged Funds were net long 20,069.
- One week after (22 September), the net long was down to 4,472.
- By 29 September they were net short again, and by 6 October net short 30,379.
In three weeks, hedge funds gave back about 50,000 contracts of their September buying. That is fast money doing what it does: positioning for an event, then leaving when the event disappoints. Our study of managed money found the same pattern in commodities: fast speculative money tends to follow the price move that has just happened, not lead the next one.
Asset Managers Did Not Follow
The other big group of buy-side traders in the yen did something different. Asset Managers, which covers pension funds, insurers, mutual funds and other institutional money, bought the yen through September and kept buying after the BOJ.
- 28 July: net short 80,077
- 15 September: net long 54,821
- 6 October: net long 68,749, their largest since 9 December 2025
That is a swing of 148,826 contracts in ten weeks, and unlike the hedge fund position it is still growing. On the latest report, Asset Managers were net long almost 70,000 contracts while Leveraged Funds were net short about 30,000.
When these two groups disagree, it pays to know which one you are looking at. Some COT summaries use the Legacy report, which lumps both groups into one "non-commercial" number, so the split disappears. Our guide to commercial vs non-commercial positioning explains why COTInsight reads the financial markets from the TFF report instead.
How Crowded Is the Yen Now?
The dashboard reads the yen from Leveraged Funds positioning. On 6 October:
| Measure | Reading | What it means |
|---|---|---|
| Net position | -30,379 | Short again, but a quarter of June's size |
| Z-score (52 weeks) | +1.33 | Well above the one-year average, because the year was so short |
| COT Index (3 years) | 64 | Upper half of the 3-year range |
This is why a single number can mislead. The fund position is net short, which sounds bearish for the yen. But against a year in which hedge funds were deeply short, today's position is actually one of the least short readings, so the z-score is positive. The z-score guide and COT Index guide show how each reading is built.
The trade is also much smaller. Open interest fell from 581,281 contracts on 15 September to 401,029, a 31% drop. Much of the September position was closed, not passed on to someone else.
What to Watch Next
- Do Leveraged Funds keep selling? A return toward -100,000 would put the yen short back where it was this summer.
- Do Asset Managers hold their long? They have added for ten weeks. If they start selling while hedge funds are short, both groups would be on the same side again.
- The next BOJ meeting at the end of October. The September report showed how quickly the fast money positions for a BOJ decision.
- The dollar side. The yen is one leg of a dollar trade. Our note on the dollar as a crowded trade covers positioning across the other major currencies.
The next COT report, with positions as of Tuesday 13 October, is released on Friday 16 October at 3:30 PM Eastern.
Track the Yen Every Week With COTInsight
The September flip showed up in the COT data before the BOJ decision, and the reversal showed up one report later. Catching both needs the data read the moment it lands.
- Free and Pro show the yen's net position, z-score, COT Index and regime every week, with the TFF trader groups broken out. Pro adds 10 years of history and CSV export, enough to compare this September with 2007.
- Ultimate adds the full archive back to 2006, where the only bigger yen shorts sit, plus PDF reports, weekly AI commentary, the REST API and VS comparison, which puts the yen next to the euro, the pound or the Australian dollar in one view.
- The Historical Outcome Analyzer (Ultimate) shows what the yen did 4, 8 and 12 weeks after every past reading like today's, in the yen's own history. Reading each market on its own record works: in our test on 46 futures markets, tendencies found in the first half of each market's history pointed the right way 56.1% of the time at 8 weeks on the second half, against a normal rate of 50.7%. Details in our guide to trading the COT report.
- The COTInsight TradingView indicator (Ultimate) puts the yen's COT Index, z-score and regime under your USD/JPY chart.
See pricing, open the dashboard, or read our COT guide for forex traders.
Frequently Asked Questions
What does the yen COT report show this week?
On the TFF report for Tuesday 6 October 2026, Leveraged Funds were net short 30,379 CME yen contracts, Asset Managers were net long 68,749 and Dealers were net short 82,167. The next report, for 13 October, is released on Friday 16 October.
Are speculators net long the Japanese yen?
It depends on which speculators. Asset Managers are net long, at their largest since December 2025. Leveraged Funds, the hedge fund group, were briefly net long in mid-September for the first time since July 2025, but were back to net short by 29 September.
How big was the yen short positioning in 2026?
On 30 June 2026, Leveraged Funds were net short 137,828 yen contracts, the largest since June 2007. Only nine weeks in the TFF history, all in the first half of 2007, had a bigger hedge fund short.
What happened to yen positioning after the BOJ rate hike?
The Bank of Japan raised rates to 1.25% on 18 September 2026 with two dissenting votes, and the yen weakened. Leveraged Funds, net long 20,069 contracts just before the meeting, cut that to 4,472 one week later and were net short 30,379 by 6 October.
Where does CFTC yen positioning data come from?
From the CFTC's weekly Commitments of Traders reports for the CME Japanese yen futures contract. The TFF version splits speculators into Leveraged Funds and Asset Managers. COTInsight scores it every Friday on the USD/JPY market page and in the dashboard.
Summary
Hedge funds spent most of 2026 short the yen, reaching a net short of 137,828 contracts on 30 June, the largest since 2007. In the two weeks to 15 September they bought 131,366 contracts, the biggest two-week swing toward the yen in the CFTC's records, and turned net long for the first time since July 2025. After the Bank of Japan's split-vote hike on 18 September they sold again, and by 6 October Leveraged Funds were net short 30,379. Asset Managers moved the other way and are now net long 68,749, their largest since December 2025. Hedge funds and asset managers are now on opposite sides of the yen trade.
Data: CFTC Commitments of Traders, Traders in Financial Futures report, futures and options combined, CME Japanese yen, through 6 October 2026. Past results do not guarantee future results. Not investment advice.