Investment funds are placing aggressive wagers that the U.S. dollar will weaken against the Japanese yen to below the 150 level before the year concludes, with certain longer-dated options trades even targeting a sharp drop to 140.

Data from CME Group reveals that the most heavily traded dollar-yen option on Tuesday was a November-expiring put contract with a strike price of 142.86. Overall trading volume for put options, which gain value when the dollar declines, exceeded call option volume by more than three times for contracts maturing through the end of the year.

The dollar-yen pair was quoted at 153.61 as of 8:44 a.m. in Hong Kong on Wednesday. Jerry Minier, head of G10 currency linear trading at Citigroup in London, noted that leveraged investors have stepped up activity lately, positioning for a possible shift in the currency market landscape. Option strategies centered on the dollar-yen falling below 150 by year-end have gained notable traction.

Minier added that even in the wake of a strong U.S. employment report last week, the yen has demonstrated remarkable resilience, which has boosted investor confidence in pursuing further bets on yen appreciation.