Hi guys,
why has USD become a better fueling currency than JPY for carry trade. I understand the reason why USD is now a recessive currency in carry trade, because of its low interest rates. However, I dont understand why JPY isnt a better currency to sell during carry trade than USD, espically when Japan still has a lower interest rate than that of the US. The Yen use to move much more smoothly than the dollar versus other currency back in the days. Now its the other way around. Why? Does it have to do with political regime in Japan now?
why has USD become a better fueling currency than JPY for carry trade. I understand the reason why USD is now a recessive currency in carry trade, because of its low interest rates. However, I dont understand why JPY isnt a better currency to sell during carry trade than USD, espically when Japan still has a lower interest rate than that of the US. The Yen use to move much more smoothly than the dollar versus other currency back in the days. Now its the other way around. Why? Does it have to do with political regime in Japan now?