The truth on a weak yen and carry trade

One can read everywhere( even in regional non economics newspapers) these days that carry traders causes a weakening yen .
That is not true.
What cause a weak yen is of course fundamental in terms of low short term interest rates and that carry traders playing with it.
But carry trade is maximum 20% of the whole yen short position.
did you know that ?

SO who the hell is short yen so huge ?

Easy answer : imagine you live in japan and are retired or have some money in front of you. Are you going to be happy with a maximum 0,50% remuneration? ( even if inflation is very low)
Of course not you are going to sell your yen and buy some more exciting currencies with bigger interest rates.
And that is exactly what causes the weak yen
retired in japan represents the 2/3 of the short yen position

I dont say that if there is profit taking on yen made by carry traders retired are not gonna try to cash their change profit but this is the bigger factor of the weak yen and not the carry traders as jurnalists try to explain ( some economists too )
And do not forget japan is one of the country where you live older

doesn't it mean then that the old folks there are actually in a carry trade?

Hello spieler,

I think that you confused yourself. Like nitman said, what you are saying are "carry trades"~~~It may just mean that they don't use "margin" but they still carry the trade to collect the interest, right?

Good luck with your trading

i dont confused myself.
It is a kinda carry trade but you never read something on retired.
Carry trades means , in jurnalists language , big hedge funds and banks speculating with leverage not small retired japanese.

I agree the result is the same but analyse is different

Are you living in Japan, too? I also think that we cannot make light of existence of individual investors.
I have ordinary savings account at Japanese Bank, which interest rate on the current ordinary deposit is only 0.22%(not 0.50%)! The other Japanese banks are about the same, too.
In fact, in all honestly, Bank of Japan and Japanese bureaucrats took wealth of our Japanese citizens who have governability till now...

I am in Thailand and get 5% on my saving account but i am french.

I just wanted to unlight the fact that carry traders ( big hedges and banks ) represent less than 20% of the short position on yen and not 80% as joe trader think after reading all the news on it.