Hedge funds shifted to a bullish stance on the yen just before dovish comments from Japan’s new prime minister and strong US employment data triggered the worst weekly decline for the currency since late 2009, according to a report by Bloomberg.

The report cites data from the Commodity Futures Trading Commission (CFTC) for the week ending 1 October as revealing that speculative investors moved to a net long position on the yen for the first time since mid-August, with the buying spree coming just before Prime Minister Shigeru Ishiba stated that Japan was not yet ready for further interest rate hikes.

Additionally, a robust US non-farm payrolls report, which came in higher than all estimates, bolstered demand for the dollar, leading markets to reduce expectations for a significant Federal Reserve rate cut next month.

The yen tumbled 4.4% against the dollar last week – the steepest loss since December 2009 – as the surprising jobs report and Ishiba’s remarks forced investors to rethink the yen’s trajectory. In response, many investors, including hedge funds, have resumed short bets against the yen, reflecting a growing bearish sentiment on the currency.