Reason for JPY strength?

Discussion in 'Forex' started by kxvid, Oct 27, 2008.

  1. kxvid


    Can anybody explain why the yen is so strong if the nikkei is falling 6%+ a day and Japanese banks need billions in bailouts? Shouldn't the yen be tanking just like the euro is against the dollar?
  2. I believe it's the Yen carry trade, still unwinding.
  3. Lots of Wall Streeters have an Asian fetish. Since a quarter of them got laid off, guess where they're going?

    Huge Yen demand.
  4. pokemon
  5. In the article they call it the "world's biggest easy money scheme", and so it was: you borrow at low rates from Japan, leveraged heavily, and then invest in a higher-yielding something or other elsewhere. A lot of those elsewheres were in Australia, Europe, and US. Now the US rate is going to 1% - once the dollar stops strengthening, a while down the road when risk appetite comes back... will it ignite a USD carry trade?
  6. zdreg


    hugh ba(h)t demand
  7. Maybe it is because as I read, not sure about it, the Asian Governments are trying to strength their economies in order to give a turn to the economy table.
  8. The October Repatriation Rally for the Yen. :cool:
    #10     Oct 29, 2008