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Carry trade is a popular investment strategy that involves borrowing money at a low-interest rate and investing it in higher-yielding assets. The concept is simple: borrow low, lend or invest high. The strategy can be used to generate significant returns over time, as the low-interest rate loan allows investors to take advantage of the higher returns generated by the asset they are buying. Carry trade is popular among individual investors and institutional investors alike, as it requires minimal effort and can generate significant returns. The strategy can be used in a variety of markets and asset classes, including stocks, bonds, commodities, currencies, and real estate. There are several news sources and websites that provide up-to-date information about the carry trade and its implications for investors. These sources can be used to gain an understanding of current market trends and potential opportunities. Additionally, there are several articles and videos available online that provide more in-depth explanations of the carry trade and its potential benefits.
The yen's appreciation in August 2024 underscored the risks associated with unwinding currency carry trades. Policymakers must implement safeguards to address volatile capital flows as ASEAN+3 deepens its integration into global financial markets.
Fear is rising among bond traders as yields continue to spike in both the U.S. and Japan. There are growing worries on Wall Street of a capital flight from the U.S. and that the Japan carry trade might begin unwinding as long-dated bond yields near ...
(Bloomberg) -- An unprecedented disconnect between Hong Kong and US interest rates is fueling the world’s top-performing carry trade — and stoking a fresh debate about the long-term appeal of the city’s pegged exchange rate.Most Read from BloombergShuttered NY College Has Alumni Fighting Over Its FutureTrump’s Military Parade Has Washington Bracing for Tanks and WeaponryNYC Renters Brace for Price Hikes After Broker-Fee BanDo World’s Fairs Still Matter?NY Long Island Rail Service Resumes After G
As this week has progressed with the Western Capitalist Imperialists struggling with rising bond yields China can afford a wry smile. We noted the all-time lows being seen as its benchmark 10 year yield went below 2% as autumn turned to winter last year. Well now it is 1.75% as those invested in Chinese government…
The risk now is that this shift reverberates beyond Japan: tighter BoJ policy could counterbalance Fed-driven optimism, pressure richly valued US tech names and weigh on Europe’s luxury and cyclical exporters exposed to Asian demand. On the fixed income side, reduced Japanese demand for overseas bonds could push yields higher—especially long-term maturities in the DM markets—while FX moves could worsen matters if the yen strengthens and the BoJ continues its normalization, potentially triggering a reverse carry trade. In short, what looks like a step toward long-term normalization in Japan risks feeding near-term risk-off sentiment globally. The Japanese 10-year bond rose following the BoJ decision, while the US 10-year yield probably hit a bottom around 4%. Futures markets are mostly flat this morning, with FedEx up 6% in after-hours trading on strong results. We could see some profit-taking at the end of a central bank-heavy week: the Fed started cutting rates and indicated more cuts could come, but with wide divergence among members about next steps; the BoC cut its rates by 25bp, while the BoE and BoJ stayed on hold.