(Bloomberg) -- Investors and traders continue to ramp up their bullish bets on the yen, with one eye firmly fixed on looming Bank of Japan management changes. 

Citigroup Inc.’s pain gauge for the yen, a measure of overall trader positioning, has climbed above zero for the first time since 2021, a sign of increasing positive sentiment. Investors continue to bet the BOJ’s change of leadership in April will be a catalyst for more policy tweaks, which are seen boosting the Japanese currency.

The Japanese currency has rallied more than 11% from its October low, helped in part by the BOJ’s surprise move in December to double its ceiling for benchmark yields. While new governor nominee Kazuo Ueda has so far suggested the central bank will not immediately change policy under his watch, some see the potential for one last tweak from the incumbent, Haruhiko Kuroda.

Ueda Warns Against Magic Solutions, Sticks Largely to BOJ Script

“There remains a chance the BOJ will abolish the negative interest rate at Governor Kuroda’s last meeting in March, putting a reasonable amount of appreciation pressure on the yen,” said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp. 

Still, the Japanese currency has come under pressure in recent weeks, from a surge higher in US yields, which favors the greenback. The yen fell to a two-month low of 136.55 per dollar Monday before paring losses.

Goldman Sees Modest Yen Weakness From US Rates Despite BOJ Bets

“The main theme in the market now is the US economy and rate cycle, which supports the dollar, and so, the impact from the BOJ would be somewhat limited,” Uno said.

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