Doesn’t the Yen carry treads also put the US Fed in a precarious position? If the US lowers rates, then this also makes the YCT less attractive, correct?
Thanks for the insight. Many companies participate in the carry trade as well when entering into USD/JPY cross currency swaps synthetically creating a yen liability as a net investment hedge of the value of a Japanese foreign sub while picking up the interest rate differential through earnings, was a popular trade
As always.. well explained and incredibly useful. Thanks.
You bet, Paul. Thank you!
Doesn’t the Yen carry treads also put the US Fed in a precarious position? If the US lowers rates, then this also makes the YCT less attractive, correct?
Thanks for the insight. Many companies participate in the carry trade as well when entering into USD/JPY cross currency swaps synthetically creating a yen liability as a net investment hedge of the value of a Japanese foreign sub while picking up the interest rate differential through earnings, was a popular trade