Hedge Funds Bet Against Yen Amid Political Uncertainty
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BTCCSquare news:
Hedge funds have amassed $1.1 billion in bearish yen contracts, marking the first net short position since March. Political instability looms as Prime Minister Shigeru Ishiba’s Liberal Democratic Party faces potential losses in the Upper House elections, raising fears of fiscal chaos and unmanageable economic policy.
The yen has shed nearly 3% in July, reversing a 10% rally from the first half of the year. Wells Fargo strategists warn the currency could plunge to 150 per dollar if opposition parties gain control, citing risks of expanded fiscal deficits and consumption tax cuts. Bond market volatility exacerbates the pressure, with ten-year Japanese government yields adding to the currency's woes.
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