US trade policy moves make yen more attractive — Bloomberg

Institutional investors are turning more optimistic about the yen as US import tariffs fuel demand for the Japanese currency, according to Bloomberg.

In the week ending April 8, asset managers increased their net long positions on the yen to a record high in Commodity Futures Trading Commission (CFTC) data going back to 2006. The Japanese currency strengthened by 2.3% against the dollar last week, hitting its highest level since September on Friday, according to the agency.

This month, the yen has emerged as one of the world’s strongest currencies. As Bloomberg explains, investors are growing concerned that trade tensions, fueled by US President Donald Trump’s aggressive trade policies, could slow global economic growth. Against this backdrop, speculative traders have become short on the dollar.

The yen also benefits from Japan's domestic policy outlook. The country's central bank is expected to raise its interest rate at the upcoming meeting. Meanwhile, the regulator's actions appear aimed at strengthening the national currency, according to Barclays analysts.