Paul Tudor Jones is one of the most respected macro investors alive, and right now he has his eye on a trade that most retail investors haven’t even thought about: the Japanese yen. In a recent episode of the “Invest Like The Best” podcast, the billionaire hedge fund legend described his current positioning philosophy — studying markets like a boxer studying an opponent, biding his time, and swinging hard when the right opening appears. His latest big swing? The yen, particularly against the US dollar, which he believes is setting up for a significant reversal after years of multi-decade lows.
The numbers behind the trade are striking. Japan holds approximately $4.5 trillion in net foreign investment assets, with roughly 60% of that — about $2.7 trillion — parked in US dollar-denominated positions. The yen has fallen more than 50% against the dollar since 2012, and is down another 10.7% over the past 12 months alone. Tudor Jones argues that the currency has become deeply undervalued, underowned, and “way out of whack” relative to fundamentals. The catalyst he is watching is Japan’s newly elected Prime Minister, Sanae Takaichi, whom he describes as the most dynamic Japanese leader in at least half a century. Takaichi’s pro-business, Japan-first economic agenda mirrors what Tudor Jones says he has seen play out in the UK with Margaret Thatcher and in the US with Ronald Reagan and Donald Trump — each of those leadership shifts coincided with roughly 10% currency appreciation. With Japan sitting on one of the world’s largest dollar liabilities as a share of GDP, any meaningful shift in policy toward currency strength could create a powerful and fast-moving reversal. Tudor Jones cited similar setups that have defined his best trades: his 2020 bitcoin bet and his 2022 short on US short-term rates ahead of the inflation surge.
For retail investors, this doesn’t require taking a direct position in yen futures. There are several accessible ways to express this view. ETFs like the Invesco CurrencyShares Japanese Yen Trust (FXY) provide direct yen exposure. Alternatively, investors can look at Japanese equities denominated in yen — like those tracked by the iShares MSCI Japan ETF (EWJ) — which would benefit both from a yen rebound and from the domestic economic boost a strong leader like Takaichi could drive. The key risk to the trade is timing: currency macro trades can take quarters or even years to play out, and yen weakness could extend further before reversing. But for investors with a 12-to-24-month horizon, Tudor Jones’s framework is worth understanding: find assets that are undervalued, underowned, and backed by a catalytic structural change. Right now, he thinks the Japanese yen checks all three boxes.
