Under The Radar: Don't Forget About The Yen
Remember that nasty selloff in late February. One of the causes for that selloff was the concern over the unwinding of the "yen-carry trade".If you look at the chart above, you can see the big spike in the Yen back then, which exacerbated the declines in the markets.
While everyone was solely focused on the subprime credit markets here in the U.S. this week, don't discount the sleepy move higher in the Yen as well. More than a few market participants are involved in this trade, and when the Yen starts rallying, they start sweating.
I don't think it becomes a big problem, but it is worth keeping on your radar.
posted by J. Kahn @ 12:15 PM
2 comments
2 Comments:
I haven't heard a single person talking about this. It could add to the negative move when people begin to turn their attention away from subprime. Thanks for the insight!
Zach
All due respect, Zach, but people were talking about it all week.
Not meaning to show you up, just wanted to comment that it's certainly been "factored."
Further declines in the dollar price of the yen, however, are not, so we could see more damage if it continues up.
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