(Bloomberg) -- Traders edged back from record bets on yen weakness this past week, in a period that included a likely bout of intervention by Japanese officials to support their currency.  

Leveraged funds and asset managers now hold roughly a combined 174,500 contracts tied to bets the yen will fall in the weeks to come, according to the latest data from the Commodity Futures Trading Commission, covering the week through Tuesday. That’s a slight pullback from the week before, when speculative traders held a historically high level of yen shorts. 

There was extra focus on this week’s report as a way to gauge how sharply traders had slashed their bearish yen positions after Japanese officials likely stepped in to buy the currency on Monday, causing it to rebound from a 34-year low. The initial indication is that the pullback on bearish bets was relatively shallow, although the reporting period didn’t include a second likely Japanese intervention, on Wednesday. It was the first time in more than a month that these traders trimmed their yen short stance.

Read more: Japan Likely Spent About $23 Billion in Latest Yen Intervention

“These data points are only really interesting at relative extremes,” said Shaun Osborne, chief foreign-exchange strategist at Scotiabank, ahead of Friday’s release. “We’re at one of those extremes now.” 

While not captured in today’s report, Friday’s US job-market data is likely further pressuring yen bears. The Japanese currency rallied against the dollar after April data showed employers slowed hiring, fueling bets on a Federal Reserve interest-rate cut as soon as September. That sent the dollar tumbling against Group-of-10 peers while Treasury yields plunged, moves that stand to aid Japan’s efforts to support the yen.  

The reporting cut-off each week for the CFTC’s commitment of traders reports, which detail net positions across physical commodity and financial derivatives alike, is the end of trading Tuesday. That means that any changes to trader sentiment would have been captured in the middle of Japan’s two suspected interventions this week — first the move on Monday, and then again late in the New York session Wednesday when the Japanese currency abruptly surged nearly 3% in a matter of minutes. 

During a press conference Friday, Japan’s finance minister declined to confirm if the nation stepped in to support the yen this week. The currency is also the most-shorted among major currencies tracked by the CFTC, data compiled by Bloomberg show. 

Read more: Japan’s Suzuki Keeps Traders Guessing Whether or Not Intervened

Speculative traders have been consistently short the Japanese currency since early 2023. That means that at least some bearish bets could prove to have more staying power than those placed in recent weeks as the currency’s slide accelerated. 

“A lot of those short positions will have been built up some time ago, suggesting that the MOF may have to knock dollar-yen lower to really undermine the resolve of many speculators,” said Jane Foley, head of currency strategy at Rabobank, ahead of the release Friday.  

Read the QuickTake: Why the Yen Is So Weak and What That Means for Japan

--With assistance from Nazmul Ahasan and Robert Fullem.

(Updates to include latest CFTC data.)

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