5 Mar 2014
Flash: JPY; Back to the Carry Trade?" - TDS
FXStreet (Guatemala) - Strategists at TD Securities explained that the BoJ Governor Kuroda extended an open invitation to short the JPY and buy higher yielding currencies.
Key Quotes:
"BoJ Governor Kuroda extended an open invitation to short the JPY and buy higher yielding currencies.by telling the Japanese parliament that there was momentum behind the yen carry trade. On the day, that looks a great call, AUD/JPY has reversed yesterday’s weakness and is trading back towards the upper end of the recent trading range—but that has perhaps as much to do with Ukraine/Russia as Kuroda".
"We won’t argue with the idea of shorting the JPY but we would argue that carry trades, which have not performed well over the past year broadly, may not make a comeback until spreads/volatility are more attractive."
Key Quotes:
"BoJ Governor Kuroda extended an open invitation to short the JPY and buy higher yielding currencies.by telling the Japanese parliament that there was momentum behind the yen carry trade. On the day, that looks a great call, AUD/JPY has reversed yesterday’s weakness and is trading back towards the upper end of the recent trading range—but that has perhaps as much to do with Ukraine/Russia as Kuroda".
"We won’t argue with the idea of shorting the JPY but we would argue that carry trades, which have not performed well over the past year broadly, may not make a comeback until spreads/volatility are more attractive."