Hedge Funds Shift Focus to Japanese Yen Amid Currency Market Volatility
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Hedge funds are moving away from the dollar and significantly increasing their trades in the Japanese yen following strong wage data and rising interest rate expectations.
A wild week in the currency markets has led hedge funds to exit their dollar trades and shift their focus toward the Japanese yen.
Interest in the yen surged on Wednesday, making it the most-traded currency against the dollar, according to data from the Depository Trust & Clearing Corp. Option trading volume on the yen was nearly double that of its previous high this year, as the currency rallied against all major peers after better-than-expected Japanese wage data supported the notion that the Bank of Japan will continue to raise interest rates.
