Hedge funds bet on repeat of this year's profitable yen plunge

[NEW YORK] Hedge funds are betting on another run of yen weakness, a trade that made money earlier this year for billionaire George Soros, putting them in opposition to economists who see Japan's currency little changed into next year.

Futures traders pushed net shorts, or wagers that the yen will fall versus the US dollar, to the highest since July 2007, according to the Commodity Futures Trading Commission. That contrasts with the median estimate of more than 50 analysts surveyed by Bloomberg, which puts the currency at 102 per dollar at the end of the first quarter of 2014, from 101.43 as of 2 pm in Tokyo yesterday.

Japan has resorted to an unprecedented US$70 billion of monthly bond purchases since April to depreciate its currency, boost growth and combat deflation. The yen has plunged 15 per cent this year, on pace for the biggest drop since 1979.