The juiciest profits from betting against the yen ¡ª one of the hottest macro trades of 2022 ¡ª are a thing of the past, according to a growing cohort of strategists.
Three key pillars of the sell-the-yen trade ¡ª a widening U.S.-Japan interest-rate gap, soaring oil prices and the loss of the currency¡¯s haven status ¡ª are crumbling, as growing recessionary fears keep a cap on yields, put pressure on crude and send investors back into the arms of traditional safe assets. Dollar-yen, which soared 38% from a March 2020 trough to mid-July this year, is in retreat.
¡°The big yen short as we know it this year, it¡¯s over,¡± said Rodrigo Catril, strategist at National Australia Bank in Sydney. ¡°Dollar-yen¡¯s peak is now likely behind us.¡±
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