With the prospects of deflation in Japan, no rates there but expectation in the US of eventual tightening do you think the preferred carrytrade with switch to being more Yen based? Any views welcome.
Probably, but not until the expectations of Fed tightening actually take hold. Until then, there's no reason they cannot both be funding currencies. However, it's a good bet that USD/JPY is either at, or approaching an excellent buy point.