By Stephen Gandel
May 23, 2013

FORTUNE — The “Abe Trade” just hit a major bump.

Toward the end of last year, a number of large hedge funds began piling into Japan. Driving the bet was the country’s new prime minister Shinzo Abe, who said he favored flooding Japan’s markets with cash from its central bank in order to finally pull its economy out of its perpetual slump. And hedge funds, for all their griping about Ben Bernanke for doing essentially the same thing — on a relatively smaller scale, no less — fell in love with Abenomics.

The most popular trades appear to have been to bet against the yen and to buy up Japanese stocks. Both of those trades crapped out on Thursday. Japanese stocks plunged 7%. The yen was up 2% against the dollar. Thursday’s Japanese market rout appeared to be based on new fears about a slowdown in China and the prospect that the U.S. central bank would stop buying bonds to drive down interest rates.

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This might not be the end of the “Abe Trade.” It’s hard to know how much money was lost in the Japan rout. Many of the hedge funds had made pretty good money on the trade in the past few months, so they may not be in the red on Japan even after the recent drop. But here are the fund managers who likely took the biggest hits:

1) Dan Loeb

Loeb has been the most recent hedge fund manager to proclaim his love for Japan. That means he is the most likely to have bought near the top. In early May, after dipping his toe in the water in the first quarter, Loeb said his $11.7 billion Third Point fund was making a broad bet on Japanese stocks. About a week later, Loeb’s fund disclosed it had amassed a significant stake in Sony (SNE) and was pushing for changes. But Loeb said he was buying not just on stimulus from Japan’s central bank, but also because of structural changes, such as reforms that will alter wages and bring more women into the workforce, that he predicts will make the economy more efficient.

2) Paul Tudor Jones

Jones was one of the first hedge fund mangers to question Ben Bernanke’s plan to boost the economy by buying bonds and driving down interest rates. These days all of the so-called smart money are doing it. But, apparently, what’s “perverse” for Peoria, is A-OK for Osaka. Jones’s Tudor Investments saw its flagship fund rise 9% in the last two months of 2012 and first month of this year largely on a bet against the yen. But he has also been going long on Japanese stocks as well. In the first quarter of this year, Jones’s fund invested $10.8 million in the iShares MSCI Japanese index (EWJ), an ETF that tracks the Japanese stock market.

3) Stan Druckenmiller

In early May, Druckenmiller, who for 12 years led Soros’s Quantum fund, said he thought Japan was in the early stages of a bull market. He likes Japan because its central bank was trying “QE times 3.” He said the central bank’s bond-buying efforts would work better in Japan than in the U.S. because deflation is a real threat in Japan. He thinks the Federal Reserve will have to abandon QE sooner than people think as the economy recovers, causing a U.S. stock market crash.

4) Louis Bacon

Bacon’s Moore Capital has struggled lately, forcing it to give back some his investors’ money. The one big trade that has paid off is Japan. Bacon has been reportedly betting against the yen since last November. As of the end of the first quarter, Moore had investments in Japanese finance companies Mitsubishi and Sumitomo Mitsui, though Japan’s stocks didn’t appear to make up a big portion of its stock portfolio.

And one winner: Kyle Bass

Bass, who became famous for betting against the housing market, has been saying for a while that his current big short is Japan, which he calls a “Ponzi on top of a Ponzi” and thinks could be on the verge of its own financial crisis. Japan has way to much debt. Japanese savers, which have largely supported their government’s borrowing, are tapped out. Bass recently went so far as to commission a poll to prove it. It asked just over 1,000 Japanese investors whether they would be willing to buy more of their country’s bonds if Japan entered a crisis. The result: 83% said they would “run, not walk” away from the Japanese bond market. Still, Bass has been betting against Japan, and has been wrong for a while — until recently. And Bass is serial worrier. He has also bet against Greece and other countries in Europe. And he owns a survival ranch on thousands of acres in the middle of nowhere in Texas.

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But perhaps the best call on Japanese stocks came from the relatively unknown Sensato Capital Management, which manages $1.3 billion and is based in San Francisco. The firm’s Asia fund, which was up 7% in April alone, has bet heavily on Japanese stocks this year. But on Monday, the firm’s co-founders Ernest Chow and Jonathan Howe sent a letter to investors saying they now believed the Japanese stock market was overvalued, and it was time to sell. Well played.

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