Asset managers trimmed bearish positions on the yen by the most in more than three years as inflation continues to put pressure on the Bank of Japan to adjust its ultra-loose monetary policy this year.

The latest Commodity Futures Trading Commission data for the five days through July 18 also showed a slight reduction in the still-bearish bets of hedge funds. Meanwhile, one-week risk reversals, which show demand for call options to buy the yen relative to put options to sell it, suggest that traders are hedging for a stronger currency.

The yen has had a wild ride since the end of June, rebounding more than 5% from its weakest versus the dollar since November, before trimming more than half of that rally to trade around 141.70 on Monday morning in Tokyo. While the likelihood of a BOJ policy tweak this week appears to be falling after a report Friday that said officials see little urgent need to act on yield-curve control, a growing number of economists continue to see change as possible later this year.

Ueda Says BOJ to Keep Easing Unless Shift in Price Goal View

Although the yen is feeling depreciation pressure at the moment, “traders are hedging against the risk of a stronger yen,” said Takeshi Ishida, a currency strategist at Resona Bank Ltd. “While it’s more likely that the BOJ won’t change policy, the magnitude of yen moves in the event of a policy adjustment would be big,” he added.