Hedge funds are renewing their attack against the yen.
Days after the yen rallied from a 34-year low amid the suspected intervention by authorities to support the currency, leveraged funds have begun re-entering bets it will slump back toward 160 in the coming weeks, according to option traders.
Short-term funds have started buying one- to three-month dollar-yen reverse knock-out call-option contracts, or RKOs, this week which gain in value if the currency pair rises.
“The preference for RKOs clearly shows that the market is circumspect about intervention and as such feels that the move higher in USD/JPY will be a ...