how long can the Yen carry trade last??? Seems that its working so well that the BOJ would never decide to raise rates.
No one knows, but Japan is running massive deficits, growing with each year as more and more people retire into the nest egg of their socialist-welfare golden years, and fewer young people exist to replace them in the workforce. Rest assured, there is a huge struggle behind the scenes between Japanese officials and their foreign counterparts, with a discussion of the devastating effects a quick appreciation of the yen would have on global financial/equity markets. The BOJ is at the center of a global hurricane brewing right now. In the mean time, Australian treasuries are paying 7.5%, and all seems well in the world, as arbitragers sleep warmly nestled in their beds - for now.