Hedge funds have turned bullish on the yen for the first time since 2021 after sharp swings in foreign exchange markets led to a surge in a popular yen trade. According to the latest data from the U.S. Commodity Futures Trading Commission (CFTC) for the week ended Aug. 13, leveraged funds held about $7 million worth of 86 contracts betting that the yen would appreciate, and speculators were generally bracing for a rise in the yen, marking a sharp shift from the extremely negative sentiment traders had seen in early July. Speculative traders held about 20,000 contracts betting on a weaker yen a week ago. These traders have been reducing their short bets since early July, when the yen has rallied about 9 per cent against the dollar, outperforming all other G10 currencies.