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Alternative Market Briefing

Hedge funds are seeing opportunity in shorting yen

Wednesday, November 27, 2013

Komfie Manalo, Opalesque Asia:

Hedge funds are betting on another run of the yen’s weakness, in contrast to economists who believe the Japanese yen would remain unchanged into 2014.

In a report, Bloomberg cited data released by the Commodity Futures Trading Commission (CFTC), which said that futures traders believe the yen will fall against the U.S. dollars. 50 analysts surveyed by Bloomberg see the yen hover at 102 per dollar at the end of the first quarter of next year from its current 101.47.

"Japan has resorted to an unprecedented $70 billion of monthly bond purchases since April to depreciate its currency, boost growth and combat deflation," the report says. "The yen has plunged 15 percent this year, on pace for the biggest drop since 1979."

Many hedge funds are trying to duplicate George Soros’ success in the Japanese yen who earned nearly $1bn November 2012 to February 2013 on wagers that the Japanese currency would tumble, says Bloomberg.

Stan Druckenmiller, Soros’s former chief strategist and the founder of Duquesne Capital said in a Bloomberg interview in September that his firm was "short some yen," while being "long some Japanese" stocks.

Another report by Tradingfloor.com on Monday confirmed......................

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