(Bloomberg) -- Traders upped bearish yen positions to a record high in the days ahead of the Bank of Japan’s policy meeting, as a weakening currency fueled intervention risks. 

Combined bets by hedge funds and asset managers on yen weakness climbed to 184,180 contracts in the week through Tuesday, April 23, surpassing the record net short position set the week prior, according to Commodity Futures Trading Commission data going back to 2006. 

Holders of yen shorts were rewarded Friday as the Japanese currency sank 1.4% to a fresh, 34-year low 157.88 per dollar on Friday. The retreat came after the Bank of Japan held monetary policy steady at the conclusion of its meeting, disappointing traders hoping for hawkish signals from Governor Kazuo Ueda, and after a reading of underlying US inflation data matched expectations. 

Read more: Yen Drops Beyond 157 Per Dollar as BOJ Keeps Key Rate Unchanged

The yen’s weakness so far this year has raised the risk that officials may soon step in to the market to stop the selloff. The currency has lost more than 10% of its value versus the greenback this year, the worst performer among Group-of-10 peers. Driving the depreciation is the yawning gap between the interest rates in the US — which are at highest in decades after the Fed’s aggressive tightening cycle — and those in Japan, where borrowing costs remain stubbornly low near zero. 

“The lack of meaningful change sends a clear message – the BOJ’s reaction function is not as sensitive to the FX rate as market participants believed, at least not at current levels,” wrote NatWest currency strategists Brian Daingerfield and Antony George in a Friday note, following the Bank of Japan’s meeting and before the release of the CFTC data.

On the other hand, “the clearest factor pushing for intervention is positioning and momentum,” they said.

Read more: Why the Yen Is So Weak and What That Means for Japan: QuickTake

(Corrects to indicate actual number of contracts in second paragraph.)

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