Goldman Sachs Research discusses yen's latest positioning.

"Japan's largest FX intervention in 15 years forced a sharp reduction in tactical Yen carry positions- even bigger than the initial unwind after the July 2024 operations. But the less Yen-positive macro backdrop likely in part explains why USD/JPY has already reversed nearly half of its initial decline," GS notes.

"Despite the significant drop in speculative positioning, more unwinds can follow if the right conditions align. Positioning could even flip net long if the macro and market backdrop argues for a stronger Yen, as it did in July-August 2024. Recession risk is much lower today than in the summer of 2024, and a bullish shift in JPY sentiment often requires the emergence of growth concerns.

But markets now view a September Bank of Japan hike as roughly 75% likely, and a faster pace of hikes could keep the Yen stronger for longer without a shift in the global growth backdrop," GS adds.