yen carry

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dividend

Does the carry trade blow up this September?
I see no active discussion about it. What would happen if BOJ hikes and Fed cuts. What are some educated hypothesises on what would be most affected.
 
http://news.search.yahoo.com/news/search?p=fukui&c=

Fukui was determined that his legacy would be to raise rates, his term is up in March and he has been effectively stymied. It's not going to happen.
Don't be surprised if the U S mkts are propped upped thru the Sept fomc meeting and U S rates remain unchanged.
You are betting on outliers, the best way to play your thought would be by constructing various options scenarios.
 
Quote from dividend:

Does the carry trade blow up this September?
I see no active discussion about it. What would happen if BOJ hikes and Fed cuts. What are some educated hypothesises on what would be most affected.
More...

JPY rises
NZD/AUD/GBP decline

why would it blow up if BOJ raises rates? would the trade become less attractive at 0.75% than at 0.5%?
market has been pricing in rate hike for a long time already.

also.. Japan has seen falling consumer prices for 6 months in a row now. deflation is still alive.
 
Quote from BJL:
why would it blow up if BOJ raises rates? would the trade become less attractive at 0.75% than at 0.5%?
market has been pricing in rate hike for a long time already.

also.. Japan has seen falling consumer prices for 6 months in a row now. deflation is still alive.
More...
Exactly. Also, once the yield differential JPY vs G10 is gone (if ever) then there will likely be a new low interest currency. Yield differentials happen because of local economies and political reasons and thus are bound to stay for the time being.
 
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