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Expertise on unwinding of the JPY carry trade

Tuesday, August 14, 2007
The fundamentals of the carry trade are to borrow in a low yielding currency and to lend in a higher yielding currency.

A SQUARE :: 14Aug07 Expertise on unwinding of the JPY carry trade
Category Currency
Faculty Martin Wiedmann
Expertise Foreign Exchange
Author Sona Blessing
Faculty Name
Carry trades have always been a strategy currency hedge funds pursued. However, they were never as popular then, as they are now. When FX-volatility started its decline around three years ago (reaching historical lows this year) - carry trade emerged as one of the most rewarding strategies.
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