Speculators have placed record bets on the Japanese yen, driven by expectations of further interest rate hikes by the Bank of Japan (BOJ) and concerns over the U.S. economic outlook. As of February 25, non-commercial speculators held a net long position of approximately 96,000 contracts, valued at around ¥1.2 trillion, according to CFTC data. LSEG data shows that yen long positions on a spot basis reached approximately ¥80 billion. The yen has appreciated by about 4% against the U.S. dollar since the start of 2025, reaching a five-month high of ¥148.56 per dollar. This trend has been supported by falling U.S. Treasury yields and rising Japanese government bond yields, narrowing the yield differential between the two countries. MUFG analysts highlight that the BOJ's increasingly hawkish stance has reduced the attractiveness of yen-funded carry trades. While some strategists expect the yen's strength to persist, others, such as those at Bank of America, predict a potential reversal to ¥160 per dollar in the medium term.