Thursday, Mar 27, 2008
Nice graphs
Market Oracle: Unwinding of the "Yen Carry Trade" is Bearish for Global Stock Markets
Global equity traders had, for many years, a ready source of funds at almost no interest charge. Traders have been shorting the Yen and using the funds to purchase stocks, currencies and high-yielding securities around the world. However, as of mid-2007, that "free bank account" is becoming more and more costly. The Yen carry trade is starting to unwind with very negative results for stocks.
Posted by sold 2 rent 1 @ 12:31 PM (319 views) Add Comment
2 Comments
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1. holding out said...
Does anyone have any idea of the GBP/JPY direction.
It has come down from over 250 to about 200 now and has been as low as 192. But historically this is still high.
In 1994 for e.g. the value was 150 and since then we have had inflation and they have had deflation so all other things being equal the value should come down much further or am I talking tosh.
2. Duncan said...
This doesn't really answer your question but when we went to Japan two years ago we were amazed how cheap things were.
Food was cheaper than the UK. On the local Tokyo railways most trips were 50p. We once paid 60p to go right across town.
People who had been in the eighties said Japan was really expensive but not now.
:- Duncan