Category: Yen Carry Trade
The analysis published under this category are as follows.
Wednesday, September 02, 2009
Strengthening Yen Spells Trouble for the Carry Trade and S&P500 / Stock-Markets / Yen Carry Trade
By: Donald_W_Dony
The Yen Carry Trade has provided an enormous source of capital for traders around the world. The strength or weakness of the Japanese currency played a vital role during the last bull market and the present bear equity down turn. Though the longer-term picture for the Yen appears favourable for a continuation of the carry trade, the recent month-over-month relationship between the S&P 500 and the Yen is turning against the index.
Sunday, April 05, 2009
Carry Trade Over, But the Yen Still Goes Lower / Currencies / Yen Carry Trade
By: Money_and_Markets
Bryan Rich writes: For the past eight years, the carry trade — where investors borrow money from a country with low interest rates and invest it in places that provide higher returns — became extremely popular. And since Japan kept interest rates below one percent, the yen became the funding currency of choice for carry trade investors. Read full article... Read full article...
Thursday, September 11, 2008
Carry Trade Unwinding Hell Continues / Interest-Rates / Yen Carry Trade
By: Mike_Shedlock
The Central Bank of New Zealand Cut Benchmark Lending Rate 50 Basis Points and announced "We have room to move". New Zealand's central bank cut its benchmark interest rate by a half point to 7.5 percent, more than forecast by most economists, saying the economy is in a recession and inflation will slow.
The nation's currency dropped to a 22-month low, and bond yields fell after the decision. "We've got room to move, "Reserve Bank Governor Alan Bollard said in an interview from Wellington today "We're in a loosening mode."
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Friday, August 08, 2008
Euro and US Dollar Headed Lower as Yen Carry Trade Continues to Unwind / Currencies / Yen Carry Trade
By: Richard_Gorton
An Elliott Wave 3 Down Commences In The EUR/JPYThe EUR/JPY fell lower today on increasing risk aversion to Lehman Brothers, Merrill Lynch, AIG, Fannie Mae, And Freddie Mac. It also fell lower with a massive sell off of the Chinese stocks.
Today's fall in the EUR/JPY has set in motion an Elliot Wave 3 Down in this currency pair, which will now cause disinvestment from stocks globally, not just from the BRICs, like it has been doing.
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Friday, July 25, 2008
Unwinding Yen Carry Trade Feeding Stocks Bear Market / Stock-Markets / Yen Carry Trade
By: Richard_Gorton
The yen carry trade unwound as Martin Crutsinger Associated Press related the National Association of Realtor Report that sales of existing homes fell more sharply than expected in June. Sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units which left sales 15.5 percent below where they were a year ago. The drop in sales pushed inventories of unsold single-family homes and condominiums to 4.49 million units. That represented a 11.1 month supply at the June sales pace, the second highest level in the past 24 years. Read full article... Read full article...
Tuesday, April 22, 2008
Japanese Yen Vs US Stock Market / Stock-Markets / Yen Carry Trade
By: Black_Swan
We can say with confidence that we anticipated the recent weakness of the Japanese yen. But at current levels, it makes sense to reevaluate the situation.Read full article... Read full article...
Wednesday, March 26, 2008
Unwinding of the "Yen Carry Trade" is Bearish for Global Stock Markets / Stock-Markets / Yen Carry Trade
By: Donald_W_Dony
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. Read full article... Read full article...
Sunday, December 09, 2007
US Housing Market Imploding! Japanese Yen Exploding! / Stock-Markets / Yen Carry Trade
By: Money_and_Markets
Jack Crooks writes: While the mainstream media is cheering Washington's new bailout plan for homeowners, bad news keeps pouring out of the U.S. housing markets like the floodwaters of the Chehalis River:
The percentage of home loans in any stage of foreclosure surged 70% — from 1.05% a year earlier to 1.69% in the third quarter, the worst on record.
Read full article... Read full article...
Tuesday, December 04, 2007
Unwinding of Carry Trade Sees Rising Yen and Falling Stock Markets / Currencies / Yen Carry Trade
By: Ashraf_Laidi
Yen rises across the board as risk appetite takes a fresh hit following the latest evidence of the sub-prime mortgage spillover on the market and broader economy. JP Morgan Chase's downgraded the earnings of four of its competitors on the basis of lower higher write downs and lower M&A revenue. Meanwhile, downgraded and defaulted debt has reached towards state-run pension pools in Connecticut , Montana and Florida , with the latter owning more than $1 billion of downgraded paper.Read full article... Read full article...
Thursday, November 15, 2007
Currency Cross Signals - Unwinding of Yen Carry Trades Leads to Temporary Dollar Rally Against Long-term Devaluation / Currencies / Yen Carry Trade
By: Jim_Willie_CB
In the last several weeks, tremendous movement and change has occurred in foreign currencies. Almost all foreign currencies have made multi-year highs against the crippled US Dollar. The United States suffers from wretched finances and a banking system teetering on seizures. In progress is the gradual dismantling of large tinkertoy structures within its vast network of bond risk management. Its entire business of structured finance is under siege and revaluation.
The banking & bond woes cannot be blamed on just the subprime mortgages, those mispriced collections of slime used in considerable export to those very friendly parties who supply the necessary $2.1 billion in daily US capital. No, the USDollar can be identified as a ‘subprime currency' slowly enduring recognition as such. The buck is badly mispriced, offering a yield under half of the true price inflation rate of 10.4%, falsely rated as ‘AAA' under coercion, supported by broad statistical lies, exported widely to foreign institutions, and wrecking havoc in economies who peg their currencies to the US$. How shallow can any denial be?
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Sunday, September 02, 2007
Yen Carry Trade to Continue Unwinding / Currencies / Yen Carry Trade
By: Ashraf_Laidi
As per our FX forecast made on August 1st 115.60 Yen by End of August http://www.marketoracle.co.uk/Article1717.html predicting USD/JPY to reach 115.60 by end of August, the dollar hit this very level on the last day of August from its August 1st level of 119.18. We missed our EURUSD call for $1.37 by 60 pips and our GBPUSD call for $2.100 by 70 pips. In fact, USDJPY fell by more than 700 points during the month before regaining ground and closing below 117.
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Thursday, August 23, 2007
Stock Market Gyrations and the “Yen Carry” Trade / Stock-Markets / Yen Carry Trade
By: Gary_Dorsch
For long-term buy and hold investors in the US stock market, who simply sit through wild market gyrations, it's good to know that you have “Plunge Protection Insurance.” The dynamic duo of US Treasury chief Henry Paulson and Federal Reserve chief Ben “B-52” Bernanke are working overtime these days, and using all the weapons in their arsenal to prevent a bear market from materializing, while Wall Street faces its worst financial crisis in many decades. “I asked Chairman Bernanke if he would use all the tools available to him and he said, Absolutely,” said US Senator Christopher Dodd on Aug 21st, after a meeting with Paulson and Bernanke, the top commanders of the “Plunge Protection Team” (PPT). “Historically the federal funds rate has tended to follow movements in the discount rate,” Dodd added, alluding to the PPT's most potent weapon.
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Tuesday, August 14, 2007
Gold Treads Water as "Carry Trade" Unwinds; Bank of Japan Recalls Loans / Commodities / Yen Carry Trade
By: Adrian_Ash
SPOT GOLD PRICES for immediate delivery were little moved against the US Dollar early on Tuesday, slipping 0.3% to record an AM Fix in London of $667.35 per ounce.
But gold rose against all other major currencies besides the Japanese Yen, however, as European bourses struggled to recover after opening the day 0.5% lower.
Asian stock markets outside China also pulled back or held steady at best, with shares in Sydney ending 0.8% lighter after sharp falls in the banking and home-loans sector. South Korea 's Kospi index dropped 1.7%. Hong Kong shares ended 0.5% higher.
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Tuesday, June 26, 2007
Yen Carry Trade Alert - Gold And Financial Markets / Stock-Markets / Yen Carry Trade
By: Christopher_Laird
For the past several weeks, I have been telling subscribers of my concern about the Yen again being at a low level. This present level has led to upsurges in the Yen, as traders unwind Yen carry trades. World stock markets and gold have sold off when this happens, as in late February of this year. The Yen hit a 5 year low days ago.Read full article... Read full article...
Wednesday, April 18, 2007
China's GDP May Threaten Yen Carry Trades / Currencies / Yen Carry Trade
By: Ashraf_Laidi
Going into Thursday's trading, FX traders will watch the return of major economic data from the US and Canada. But before previewing these events and their FX implications, it's worth giving synopsis on what happened in the NY session. There are some doubts about the durability of the carry trade (selling yen across the board simultaneous with rising gold and equities).
We have seen in early morning NY (around 8-9 am EST) how the yen rallied across the board, dragging the dollar, pound and euro. Rumors of a hedge fund caught in the wrong side of the rising pound and as well as rumblings of renewed reports of sub-prime defaults also led to some unwinding, which caused US stocks to open lower. With US equities struggling into record territory, a loss of momentum could easily turn into sharp selling in the event of a weak reading in the leading indicators and Philly Fed index.
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Tuesday, April 10, 2007
The Yen Carry Trade Means New Rules for Global Investing in 2007 / Stock-Markets / Yen Carry Trade
By: Gary_Dorsch
Jesse Livermore, widely regarded as one of the greatest stock market operators of all-time, considered himself a humble student of the market until his last day in 1940. “I study the market, because it's my business to trade. In the forty years which I have devoted to making speculation a successful business venture, I am still discovering new rules to apply to that business,” he once remarked.“Experience has taught me the way a market behaves is an excellent guide for an operator to follow. Observation gives you the best tips of all, and the behavior of a certain market is all you need at times. You observe, and then experience shows you how to profit by variations from the usual, that is to say, from the probable.” Read full article... Read full article...
Tuesday, March 27, 2007
The Shanghai Stock Market Bubble and the "Euro/Yen" Tug-of-War / Stock-Markets / Yen Carry Trade
By: Gary_Dorsch
"Free markets for Free men", was a slogan etched on the floor jackets of several traders at the Chicago Mercantile Exchange in the 1980's. But today, the slogan for traders is "Rigged markets for Central bankers," who try to move currency and stock markets with their control of the money spigots and timely "jawboning" to the media outlets, when markets become unruly. Today, trading in currencies, precious metals, and stock market indexes has turned into a game of central bank watching.
Right now, two of the most important pieces of the global market jig-saw puzzle are the Shanghai Stock Index bubble and the Tug-of-war over the "Euro /yen" carry trade. What happens in Shanghai can have a big influence over China's monetary policy, and is of great interest to commodity traders and Asian stock markets. The upcoming battle over the Euro /yen exchange rate can have a big influence over Japanese monetary policy and stock markets in Europe.
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Saturday, March 17, 2007
The Yen Carry Trade, Mortgages and Fingers of US Housing Instability / Stock-Markets / Yen Carry Trade
By: John_Mauldin
This week we look at the yen carry trade, delve deeper into the mortgage lending world, and see if we can find a possible connection between them and the economy in general through something called complexity theory. As I have written for many months, I think the subprime mortgage problems are going to be the catalyst for a recession. We look at some ways that the contagion in this small part of the housing market could spread.
Bubbles have consequences far beyond their causes when they burst. That is because they encourage irrational behavior and expectations not just in the asset that is rising in price, but in surrounding areas. As an example, remember the internet bubble? There were 350 internet stocks at the end of 1999, comprising a mere 6% of the market cap of total US equities. But the NASDAQ dropped by over 70%. The damage was not confined to just internet stocks.
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Wednesday, March 14, 2007
World Liquidity Crisis Emerging as the Yen Carry Trade Unravels / Economics / Yen Carry Trade
By: Christopher_Laird
With the unraveling of the Yen carry trade, a sequence of events has been set in motion for a world liquidity crisis. Combining this with ongoing pressure from US sub prime deterioration will further harm confidence in US and consequently Asian stock markets.
As of this writing, Asian markets are again down 2 to 3%. I had written last week that confidence in financial markets were dealt a major blow in the first wave of Yen Carry unwinding a week or so ago in the article titled Damage Has Been Done.
This week, we are seeing the second phase of market declines, the US Dow down 230, and as I said Asian markets down 2 to 3% again. To say the least, market sentiment is getting crushed globally.
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Tuesday, March 13, 2007
Unwinding of the Yen Carry Trade, Unravels Global Stock Markets / Currencies / Yen Carry Trade
By: Gary_Dorsch
Millions of words have been written about the heavy handed tactics of Japan’s Ministry of Finance (MoF) in manipulating the value of the Japanese yen, the Japanese bond market, and squeezing short sellers in the Nikkei-225 futures market. Manipulation of markets through the use of jawboning, re-jigging of inflation statistics, and outright intervention is a time honored tradition at the MoF.Japan’s Ministry of Finance is a political, economic, and intellectual force without parallel, and with a greater concentration of power than any branch of government amongst the major industrialized democracies. In Japan, there is no institution with more power, and it has a borrowing ceiling for foreign exchange intervention of up to 140 trillion yen ($1.2 trillion) for the upcoming fiscal year.
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Saturday, March 10, 2007
Unwinding the Yen carry Trade and its Effect on the Financial Markets / Stock-Markets / Yen Carry Trade
By: Adam_Oliensis
Two weeks ago I wrote:
I suspect that in the context of an inverted yield curve (and especially of a steepening inversion) the market's PE is unlikely to continue to expand as it has since last summer. Note that since '03 there has been a strong correlation between the sinking market PE and the flattening (and then inverting) yield curve. At present PE is rising as the trend in the yield curve resists doing likewise. I continue to suspect that that divergence is unsustainable.
The above was written in reference to the following chart when the market PE (blue line) was peaking at 15.2. It has since sunk (abruptly) to 14.5.
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Thursday, March 08, 2007
Paulson downplays Stock Market worries - Despite Yen carry trade warnings / Stock-Markets / Yen Carry Trade
By: Mike_Whitney
Hank Paulson is sweating bullets right now.In fact, a shrewd investor could probably make a fortune just figuring out what type of high-blood pressure medication he's on and then betting the farm on the manufacturer.
Last week the stock market bull plopped down on an I.E.D. and wound up in intensive-care sucking food from a straw and drifting in and out of consciousness. That put Paulson on the road to South Korea, Japan and China where he'll meet up with his foreign counterparts to strategize on the deteriorating state of world markets. It's a daunting task. The sudden rise in the yen has set off a brushfire that's swept through the global system clearing out the dead-wood and sending panicky fund managers out onto the streets.
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Tuesday, March 06, 2007
The Damage has been done to the Financial Markets as Volatility Soars and The Carry Trade Unwinds / Stock-Markets / Yen Carry Trade
By: Christopher_Laird
Up to last week, people were saying the Dow and other major markets were ever rising, the VIX was at super low levels, risk pricing was way too low in all markets.
The Dow appeared to climb ever higher, super bearish writers and economists were questioning themselves about the stock markets that never seemed to drop, but just kept climbing ever higher. There was talk about the ever greater liquidity continually pouring money into financial markets. That is was/is true.
But that was then – a couple of weeks ago. Now, market sentiment everywhere has been badly shaken. The VIX rose an incredible 60% last week. Previously, its historically low levels indicated there was virtually no investor fear in the markets. In a very real sense, the damage has now been done, and financial markets of all types are like a seriously wounded aircraft carrier, listing badly and on fire. It still floats, but just barely. Just about anything can now finish it off.
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