Japan has been calming the market time and time again about "carry trades (unwinding) not posing any risk". OF COURSE this statement is "self serving" for the Japanese Governmentm Economy and Exporters in particular. Should the Carry Trade unwinds, USDJPY could drop 500 pips, GBPJPY could drop 1500 pips and leave Japanese exporters at a bad position to compete globaly.
My question is: How much Yen is actually shorted to support the Carry Trades?
Knowing this figure, we can know specifically how big the effect can be should the Carry Traders unwind.
My question is: How much Yen is actually shorted to support the Carry Trades?
Knowing this figure, we can know specifically how big the effect can be should the Carry Traders unwind.