Carry trade is powering on as investors sidestep yen’s gains

Who claims what

• —The yen has traditionally been favored for carry trades due to Japan's low-interest rates over the years. (per article, source class B)
• —Investors continue to engage in carry trades despite the recent gains of the yen. (per article, source class B)

Our assessment

If the reported claims are accurate, ongoing carry trade activity may introduce currency volatility for firms exposed to JPY FX risk, even as the yen strengthens. Such volatility could affect cross-border contract pricing, hedging strategies, and liquidity for APAC/US/EU firms in sectors sensitive to interest and…