All articles tagged with #carry trade
The Bank of Japan is expected to raise interest rates for the first time in 11 months, which could trigger a yen carry trade unwind and lead to yen appreciation, impacting global markets and currency strategies.
Japan's bond market is experiencing rising long-term yields, sparking fears of capital outflows from the U.S. and a potential unwind of carry trades, which could lead to global market instability. The increase in yields is driven by structural factors and changing demand, raising concerns about a possible global financial crisis if confidence in safe assets erodes.
The U.S. dollar surged to a four-month high against the yen as investors engaged in yen-dollar carry trades, driven by expectations of aggressive tariffs from the Trump administration. The dollar's strength is supported by in-line U.S. inflation data and rising bond yields, despite market speculation of a potential Federal Reserve rate cut. Trump's proposed tariffs could boost the dollar by reducing U.S. demand for foreign currencies and increasing domestic inflation, prompting a reevaluation of the Fed's dovish stance. This has led to increased confidence in the dollar's performance among investors.