Global hedge funds are increasing bets that the dollar-yen exchange rate will fall below 150 by year-end as the yen carry trade (borrowing yen to buy higher-yielding assets) unwinds and expectations for additional Bank of Japan rate hikes grow. The exchange rate dropped about 5% in the week through September 8 and was near 153.61 in Hong Kong on the morning of September 9. Bloomberg reported that the most actively traded dollar-yen option on the Chicago Mercantile Exchange on September 8 was a November-expiry put with a 142.86-yen strike. Put-option volume expiring by year-end was more than three times call-option volume. Citigroup's global head of G10 foreign-exchange trading, Jerry Minier, said leveraged investors are responding aggressively to a potential shift in currency-market conditions, while strategies targeting a move below 150 have gained popularity. The yen has remained firm despite strong U.S. employment data, helped by hawkish remarks from Bank of Japan Governor Kazuo Ueda and board member Hajime Takata. The break below 155 yen per dollar, viewed as key support, accelerated the unwinding of yen-funded positions and strengthened hedge funds' bullish yen positions. Nomura said macro hedge funds have led rising demand for options targeting a decline in dollar-yen, with the market's main near-term target range around 150 to 152. Investors are also using 12-month digital options and option spreads to position for a longer-term move toward 140 per dollar.