And it is this rally that is rattling the carry trades
We can't say for sure whether this policy will lead to a yen carry trade
and flooding in cheap foreign funds (on the local markets) because there are a lot of stages that such a policy has to go through before leading to actual carry trades
," a senior official at the Bank of Korea said.
As in all of our work, here we consider a carry-trade strategy that combines individual-currency carry trades
into an equally-weighted portfolio.
The bank said that it was considering action against activities such as carry trades
that involve its short-term deposits that pay more than longer-dated government debt.
That would enhance the yen's appeal as a funding currency of choice amongst investors like hedge funds and model funds, which are increasingly looking to sell the yen and buy high-yielding currencies, called carry trades
Since carry trades
underperform when volatility is high (due to the threat of capital losses that may overwhelm carry income), a rise in volatility is unfavorable for the strategy.
Centre designed to carry trades
education into 21st century
Signs of a rise in speculative interest against the yen were evident in both a rise in dollar/yen turnover and reports of a recent surge in hedge funds' yen carry trades
long bond on fears that the new Federal Reserve Chairman would raise rates further for longer than was previously expected, and the change in monetary policy at the Bank of Japan with the implications that has for carry trades
around the world.
The common European currency jumped to the mid-163 yen level, rising nearly 3 yen from late Wednesday in Tokyo, as yen carry trades
picked up pace after both the Dow Jones Industrial Average and the Nikkei Stock Average shot up over 2 percent.
4 percent, the news failed to spur optimism in the markets, as evidenced by the subsequent drop in equities and carry trades
The US dollar and Japanese yen fell against the commodity dollars on Monday as risk appetite drove carry trades
higher through the start of the US trading session.