Bond Outlook [by bridport & cie, January 31st 2007]
The CHF and the JPY have continued their downward trend. It seems that the lower the JPY goes, the louder the warning voices about unwinding the carry-trade. In the meantime, BoJ has given up on its desire to raise rates in the immediate future, thus encouraging the carry-trade even more. Nevertheless, the carry-trade scene remains a threat to the smooth rebalancing of the world economy. |
We link the CHF to the JPY in this context. |
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