Is the carry trade really dead?

[money tree]

Theres plenty of anal-ysts telling us its all over for the carry trade.

But is it?

The interest rate arbitrage has not gone away, and may infact increase on some pairs (NZD, GBP to raise).

I dont believe for a minute that the yen will keep getting stronger to no end. The money made on the carry trade is just too easy.

Question is, at what point will the yen stop rising? As with any market, valuations reach a certain point where investors start buying.

It was around a year ago that I suggested a good play might be AUDJPY around 82. Even after huge falls last week, its @ 90 now (ignoring the mega interest received). And the interest rate differential has increased since then.

Any views?

 

[Bush Trader]

Theres plenty of anal-ysts telling us its all over for the carry trade.

But is it?

The interest rate arbitrage has not gone away, and may infact increase on some pairs (NZD, GBP to raise).

I dont believe for a minute that the yen will keep getting stronger to no end. The money made on the carry trade is just too easy.

Question is, at what point will the yen stop rising? As with any market, valuations reach a certain point where investors start buying.

It was around a year ago that I suggested a good play might be AUDJPY around 82. Even after huge falls last week, its @ 90 now (ignoring the mega interest received). And the interest rate differential has increased since then.

Any views?

Refer to my post in https://www.aussiestockforums.com/forums/showthread.php?t=6052&page=5

The article I posted is by GaveKal and offers an interesting alternative to the Panic that everyone is feeling.

Cheers

 

[Kimosabi]

I think it's more likely the over-exposed 'Carry Traders' are dead...

 

[Kauri]

I wonder how the Hedge Funds are faring???

 

[Smurf1976]

I wonder how the Hedge Funds are faring???

I wouldn't be surprised to find out in a few weeks time that one or more hedge funds have blown up. The market moves may not be huge, but they are more than enough to sink hedge funds using incredibly high leverage.

 

[wayneL]

The Aussie has suffered much more at the hands of the yen than the USD.

Take a look FWIW;