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Yen carry trade is back, but it may not last
The yen carry trade — borrowing against the yen to buy higher-yielding assets — has returned as a popular tool to leverage currency bets, but its staying power hinges on some hard-to-predict outcomes, such as the pace of Japan’s recovery. “The coordinated intervention by the G7 has certainly weakened the Japanese yen throughout March, and the extraordinary efforts taken by the group may continue to fuel demands for carry trades,” David Song, currency strategist at DailyFX, said in emailed comments. How long it will last is up in the air, and largely depends on the pace of repatriation, as Japanese companies ... (full story)