Dollar-Yen Carry Trade Just Got More Alluring, Thanks to BOJ
- Carry-to-risk ratio for dollar highest in G-10 versus the yen
- Dollar may strengthen to 118 yen before the year-end: Mizuho
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The dollar-yen carry trade just got more appealing for investors, thanks to the Bank of Japan.
The U.S.-Japan policy divergence has gained more prominence with Governor Haruhiko Kuroda’s adoption of forward guidance to convey that rates in the Asian nation will stay extremely low for an extended period. That burnishes the appeal of the arbitrage trade, say Mitsubishi UFJ Kokusai Asset Management Co. and Mizuho Securities Co., given the Federal Reserve’s projection of raising interest rates five times through end-2019.