The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

FX: Carry on trading

Is there an opportunity to initiate new positions at better levels or has the bubble burst?

Much has been made of the impact Japanese retail investors have had in dampening down volatility in the foreign exchange markets. For a long period of time, the strategy of selling yen and buying high-yielding currencies has proved popular and highly successful. The weight of the yen selling has confounded the expectations of many who have predicted that the US dollar would weaken against the yen. Supply and demand has ensured that this prospect has not materialized.

However, one impact of the global credit crunch that suddenly emerged through August was the huge and at times dramatic unwinding of carry trades. Opinion seems pretty well equally divided on the meaning of this: has the shake-out resulted in the market moving back to more attractive levels, or have things simply calmed briefly before a further storm materializes?

Carry on regardless

Spot $/¥ and one-month vol

Source: SuperDerivatives 

In a research note sent out on August 24 by its equity analysts, Credit Suisse argued that the yen carry trade is not over and that the unwinding is not "as problematic as some investors might believe".

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree