One of the most popular trades in foreign-exchange markets is losing its luster as the Bank of Japan signals the end of its negative interest rate policy.

The appeal of using borrowed yen to buy securities denominated in higher-yielding currencies, known as a carry trade, is in flux after remarks this week from the BOJ’s Hajime Takata hinted at a potential policy change. That’s giving pause to money managers, especially now that leveraged funds have boosted their bets against the yen to the most in more than six years.

"The first move — and how they signal the pathway — is very important,” said Salman Ahmed, Fidelity International’s global head of macro and strategic asset allocation. "If you have a negative shock, then the unwind can be quite vicious because there’s so much positioning on that trade.”