An exchange-traded fund designed to deliver twice the daily return of the Nikkei 225 index has experienced a significant decline during the afternoon session.

The CSOP Nikkei 225 Daily (2x) Leveraged Product (07262.HK) fell more than 5%, and was last seen trading 3.89% lower at HK$196.4, with a turnover of HK$1.36 million.

Recent data from the U.S. Commodity Futures Trading Commission reveals a sharp increase in bearish bets against the Japanese yen.

As of June 30th, leveraged traders in the options and futures markets had increased their short positions on the yen to nearly 138,000 contracts, signaling widespread expectations for further depreciation of the currency.

The yen has weakened to its lowest level since 1986 against the U.S. dollar, breaching the 162 mark and reigniting market speculation about potential intervention by Japanese authorities to support the currency.

Analysis from Haitong International suggests that while the Nikkei's sharp rally since April has been heavily reliant on artificial intelligence themes, raising concerns about a potential market correction, recent trends indicate a broadening of investor interest.

Capital rotating out of AI-focused stocks appears to be flowing into other sectors rather than exiting the equity market entirely, pointing to sustained underlying momentum for Japanese stocks.