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I actually think the JGB futures combine both. Let's consider how the trade would respond to two shocks: (1) yen depreciation vs. dollar; (2) higher Japanese interest rates. In both cases, the JGB futures would fall. Currently the carry on a JGB futures should be negative, since short term...

I've thought about using this method, but the most distant futures I see offered are for December 2010. So you can only lock in the rate for 17 months. I'd rather lock in a 10- or 30-year fixed rate.

Carry trade, by definition, has currency risk. The IB margin rates quoted are floating rates, and will change according to Fed policy. If I wanted to borrow in USD at 10-year fixed rates, I'm looking at 3.5%, based on Treasury yields.

The posting of this thread was delayed, so I'm bumping it in case anyone here has experience with a long term carry trade.

Hi, I'm new to ET. I'd like to sell short 10-year Japanese government bonds and invest the cash in other assets. As I understand the typical carry trade, usually the borrowing is done at a short term floating rate, which could be done using something as simple as Forex. I'd like to borrow...