Monday, March 3, 2008

Yen carry trade continues to unwind …

Japan may move to support tumbling dollar

Pressure is building in Japan for official intervention to cap the surging yen before it triggers a sharp industrial slowdown and tips the country back into slump. The currency has appreciated by 19pc against the dollar since July as Japanese investors retreat from global markets. Foreign hedge funds that borrowed at near zero-rates in Tokyo to chase higher yields abroad are scrambling to unwind "carry trade" positions, estimated at $1.4 trillion in its varied forms.

Posted by uncle chris @ 09:42 PM (814 views)
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6 thoughts on “Yen carry trade continues to unwind …

  • japanese uncle says:

    Pressure is building in Japan for official intervention to cap the surging yen before it triggers a sharp industrial slowdown and tips the country back into slump.
    ———————–

    Absolute rubbish! Japan is a big importer as well as an exporter. Appreciating yen does no harm to the counrty as a whole as eventually effect of cheaper imported materials filters through the economy. Even the 70yen=USD hyper yen appreciation in the 1980s was eventually managed and well adapted by the exporters. Futile support for the unsupportable USD simply reveals that the Japanese government & BoJ are dictated by the US & FRB. Pathetic.

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  • “Futile support for the unsupportable USD simply reveals that the Japanese government & BoJ are dictated by the US & FRB.”

    Yes JU, I’ve long-thought this. I can see no other explaination for the BoJ’s policies. In fact, exactly who owns the BoJ? Ah, the spoils of war.

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  • explaination??

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  • Drinking the Pacific Ocean with a teaspoon?

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  • japanese uncle says:

    Harold

    51% of the BoJ is owned by the Treasury, but the detail of the rest is undisclosed, but the rumours has it that financiers in the City and Wall Street are the stakeholders. Ex-BoJ governor like Sumita who is responsible for the creation and collapse of the bubble in the 1980s was later employed by Lazard Freres, quite like Bliar was employed by JP Morgan and Sarcozy’s brother recently employed by none but the Carlyle Group.

    By the way exorbitantly low IR is good news for banks to absorb credit losses, as they can earn huge spread between the borrowing rates and lending rates. Barnanke’s lunatic policy may be intended to do this to the US banks, along with the demolition of USD.

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  • “Sarcozy’s brother recently employed by none but the Carlyle Group”

    Somehow I’m not surprised. Viva la Revolucion.

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