The Yen Carry Trade: Is It Over?
By: Roy | August 17, 2007
The yen carry trade has probably financed hundreds of billions of investments in the financial markets but the situation looks may be arising where we could have seen the last of the yen carry trade.
The yen carry trade basically is a way of borrowing money very cheaply and the Bank of Japan has kept its interest rates very low.
However, in yesterday’s trading the yen gain sharply against the pound, Euro as well as New Zealand and Australian dollars.
This may be a sign that the carry trade may be coming to an end if people can no longer be borrowing yen cheaply.
However there still could be a carry trade industry as the interest rate in Japan is still only 0.50%, way lower than other interest rates.
Do you think the yen carry trade is over?
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