Yen’s changing fortunes might finally be spooking the bears
New tailwinds from capital repatriation, unwinding carry trades and U.S. political pressure are now giving short speculators cause to rethink their long-term game.
Dealers work near monitors showing the rate of the yen against the U.S. dollar at foreign exchange brokerage Gaitame.Com in Tokyo on Thursday. | BLOOMBERG
Sep 5, 2026
LONDON/SINGAPORE/TOKYO – Just six weeks after hitting a four-decade low against the dollar, the tide appears to be turning for the battered yen as a host of factors finally smoke out brash traders who had spent years betting against the Japanese currency.
While central bank rate hikes and record currency intervention have failed to provide lasting support for the yen, new tailwinds from capital repatriation, unwinding carry trades and U.S. political pressure are now giving short speculators cause to rethink their long-term game.
“The market psychology around the yen appears to be changing,” said Rong Ren Goh, a fixed income portfolio manager at Eastspring Investments. “Investors seem increasingly reluctant to aggressively short the JPY, particularly with the prospect of a BOJ rate hike in September adding another layer of risk to the trade.”
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