By Rae Wee and Ankur Banerjee

SINGAPORE (Reuters) -Investors laid a record wager on Japan’s yen rising to take advantage of a long-overdue economic revival that coincided with expectations for a U.S. slowdown.

Instead, what’s unfolded is a cautionary tale of the Trump era.

The yen is struggling at nine-month lows and speculators are back-pedalling from their biggest bet on the currency in records stretching back almost four decades.

They have been wrong-footed by a U.S. economy surprisingly resilient to trade shocks, where policymakers have cooled on further interest rate cuts, and by a new government in Japan that has shown preference for the central bank to keep a lid on rate rises.

The unravelling of such a popular bet underscores just how thoroughly markets have defied expectation

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