The impact of Japan's interest rate hike can be seen from the net position changes of CFTC yen positions, indicating a huge net short position in the yen at the beginning of July 2024. Quickly close short positions by the end of July. As of the latest CFTC report, the yen has been a net downward position. This also confirms the previous statement that Japan's interest rate hike has had an impact on the market, but the degree of impact is much smaller than in July and August last year. The logic here is that there is a close relationship between yen carry trades and net yen positions on the CFTC (Commodity Futures Trading Commission), mainly reflected in the following aspects: 1) Directional consistency The core of yen carry trades is to borrow low interest yen and invest in high-yield assets such as US dollar assets, emerging market bonds, etc. In CFTC's futures market data, if investors engage in yen carry trades, they usually sell yen futures contracts (i.e. establish short positions in yen) to lock in exchange rate risk or gain exchange rate spread returns. Therefore, the short direction of CFTC's net yen position is often positively correlated with the expansion of yen carry trades, and an increase in net short positions usually means that more investors are engaging in yen carry trades. 2. Scale correlation The CFTC's net yen position data can serve as a reference indicator for the size of yen carry trades. Although this data cannot fully cover the carry rate scale of over-the-counter trading, it can reflect the changes in yen holdings of mainstream institutions in the futures market, such as hedge funds and speculators. A significant fluctuation in net position (such as a rapid rise in net short position from a low level) may indicate an increase in activity in yen carry trades, while the opposite may indicate a contraction or reversal in carry trades. 3. Market expectations and sentiment The change in CFTC's net position in yen also reflects the market's expectations for the yen exchange rate and the prospects of carry trades. If the market expects a rise in yen interest rates or an increase in global economic risks, investors may liquidate their yen carry positions early, leading to a shift in CFTC yen net positions from short to long; On the contrary, if the market expects the yen interest rate to remain low and the global economy to recover, the net short position may further expand, reflecting the market's optimism towards carry trades. Of course, the net position of CFTC yen only reflects a partial trading situation in the futures market. The actual scale of yen carry trades may be larger and involve various forms such as over-the-counter derivatives and cross-border loans. Therefore, it is necessary to comprehensively evaluate the overall situation of yen carry trades by combining other data such as the yen cash flow statement and the scale of cross-border yen liabilities.