Masahiko Loo, fixed income strategist at State Street Investment Management, said pension funds and asset managers have kept selling yen against higher-yielding G10 currencies.
The market is “far less one-sided than before the intervention,” he told CNBC, but funding in yen stays attractive while US-Japan rate differentials remain wide.
Leveraged funds cut net short yen positions from almost 138,000 contracts at the end of June to 59,526 as of August 11, according to Commodity Futures Trading Commission data reported by CNBC.
Ashwin Binwani, founder of Alpha Binwani Capital, said institutional investors remained positioned in carry trades against a basket of G10 currencies led by the Australian dollar, and that he exited long dollar-yen positions after the intervention before re-establishing them just above 157.
That unwind has narrowed the gap between yen and Swiss franc short positions, prompting the start of a rotation toward the franc as a funding currency, Reuters reported, citing analysts and investors.