💹 Key Highlights:
- Hedge funds have made a dramatic shift, turning net long on the Japanese Yen for the first time in years.
- CFTC data reveals that leveraged funds are now net long 86 contracts, worth approximately $7 million.
- This is a sharp reversal from July, when these funds were net short by around 115,000 contracts—the largest net short position in several years.
📈 What’s Driving This?
- As the Japanese Yen carry trade begins to unwind, hedge funds are moving swiftly to capitalize on the shift.
- The result? The Yen has strengthened by 10% against the US dollar in just a few weeks.
🧐 Is the Carry Trade Still a Major Market Risk?
- Despite fears around the unwinding of the carry trade, this event has actually provided a massive buying opportunity.
- The S&P 500 is now less than 1% away from reaching a new all-time high, proving that the carry trade is still very much alive.
