	Active Topics Memberlist Calendar Search Help
	Register Login

Global Economies - Where are they going?
The Equity Desk Forum :Economy, Markets and commodities :Global Economies - Where are they going?

Topic: Yen Carry Trade

	<< Prev Page of 11 Next >>

Author

Message

BubbleVision
Senior Member

Joined: 05/Aug/2006
Location: India
Online Status: Offline
Posts: 3142

Posted: 07/Apr/2008 at 9:08pm

Originally posted by rakeshmehta48

In last 8-12 months Yen futures have moved from approx 8200 to 9800 today.

A move of 1600 pips.

Rest of the pips, is cost advantage for carry holder. Means his total loss for one year is 1600 pips. (Total advantage in a decade is close to 4000 pips)

And this level of 9800 came 1-2 years ago also when long term players were not cut.

I think, any one who sold yen a decade ago has a shelter upto approx 12000 in yen futures (Spot USD-JPY around 80-85 level)

To me, Capitulation looks, bit further down the road.

Having said this

Bubble Ji, I am no way in favour of carry trade. Am deadly against it

Oh....You are talking about YEN Futures and I am talking about $-Y. Hence the difference in Pips.

The 9800 level corresponding to a low of 100 in $-Y which was seen in 2004. That was subsequently broken a few weeks back. I am yet to see who has carried a currency trade for more than 10 year.

The trades taken near 1995 low in $-Y (80) must have been cut before the rout in 1998 (144). The trades entered in 1998 (100) lows would have been cut near the 2002 (135) highs and the trades entered along with BOJ lows in 2004 (100) would have got cut in late 2007 (120-118), provided one managed to trade all the bigger swings.

You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!

IP Logged

rakeshmehta48
Senior Member

Joined: 01/Dec/2007
Location: United Arab Emirates
Online Status: Offline
Posts: 544

Posted: 08/Apr/2008 at 7:40pm

[/QUOTE]

Fwiw....Its NOT Yen carry in Europe. Its the CHF carry in play there.

[/QUOTE]

BUBBLE JI

KINDLY CORRECT ME IF MY INTERPRETATION OF CARRY TRADE IS WRONG

I think CHF came on carry trade picture at a very late stage than YEN because of interest rate differentials and the quantam of YEN carry is much larger than CHF carry.

During the last ten years (From Jan 1998 till today) following is the extream movement of respective pairs:

EURJPY

Low : 88.87 (During Dec 2000 Qtr)

High : 168.63 (During Sept 2007 Qtr)

Low to High : 90%

EURCHF

Low : 1.4382 (During Sept 2001 Qtr)

High : 1.6827 (During Dec 2007 Qtr)

Low to High : 17%

SOURCE : "REUTERS TRADER FOR COMMODITIES ADVANCED" WHICH IS A SUBSCRIBED SERVICE.

Whereas EURCHF have moved 17% from low to high during last decade, EURJPY has moved 90% during the same period.

This clearly implies that much more carry trades have taken place in EURJPY than in EURCHF

Please enlighten me with your views.

Thanks!

Fund Management is Most Important

IP Logged

BubbleVision
Senior Member

Joined: 05/Aug/2006
Location: India
Online Status: Offline
Posts: 3142

Posted: 08/Apr/2008 at 8:27pm

Originally posted by rakeshmehta48

BUBBLE JI

KINDLY CORRECT ME IF MY INTERPRETATION OF CARRY TRADE IS WRONG

I think CHF came on carry trade picture at a very late stage than YEN because of interest rate differentials and the quantam of YEN carry is much larger than CHF carry.

Whereas EURCHF have moved 17% from low to high during last decade, EURJPY has moved 90% during the same period.

This clearly implies that much more carry trades have taken place in EURJPY than in EURCHF

Please enlighten me with your views.

Thanks!

I Absolutely agree that there is far more Yen-Carry than CHF carry globally. There is no debate even.

However when we talk about Eastern Europe specifically, it depends on EUR-CHF for carry-trades, as CZK, PLN, HUF are eventually to be merged into EUR by 2011. If you know guys in eastern europe, you can confirm for yourself from banks there.

BTW, there is huge carry in AUD-JPY. Dont we hear about daily Toshins and Udarashi's due to which Yen is weak. FYI...A large Toshin issue went through y'day in AUD-JPY, due to which the cross was bid up by >1%, despite the v negative AUD data.

You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!

IP Logged

rakeshmehta48
Senior Member

Joined: 01/Dec/2007
Location: United Arab Emirates
Online Status: Offline
Posts: 544

Posted: 08/Apr/2008 at 8:37pm

Thks prmt rply.

AUD-JPY is obvious cause yield diff

Any idea abt KIWI-JPY carry. To what extent

Fund Management is Most Important

IP Logged

BubbleVision
Senior Member

Joined: 05/Aug/2006
Location: India
Online Status: Offline
Posts: 3142

Posted: 08/Apr/2008 at 8:51pm

Originally posted by rakeshmehta48

Thks prmt rply.

AUD-JPY is obvious cause yield diff

Any idea abt KIWI-JPY carry. To what extent

Kiwi has a Yield of 8.25% while YEN has 0.50%. Clearly big carry.

One of Kiwi's business confidence survey (NZIER) came at a 33-Year LOW today, classic signs of hard landing.

The RBNZ is very likely to cut in the middle of the year by 75 bps in 2 instalments. So, a crash is awaiting Kiwi-Yen. The best buying opportunity is likely to come in AUD-NZD cross for conservatives and Shorting on NZD-JPY for agressers.

RBNZ would be very happy by a fall in Kiwi, as that is exactly what they want. Rembember last year, when they sold Kiwi in intervention.

You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!

IP Logged

Mohan
Senior Member

Joined: 09/Feb/2007
Location: United States
Online Status: Offline
Posts: 1855

Posted: 09/Apr/2008 at 7:04pm

Bubble,
Is the KIWI having the highest yield differential to the JPY ?

Be fearful when others are greedy and be greedy when others are fearful.

IP Logged

BubbleVision
Senior Member

Joined: 05/Aug/2006
Location: India
Online Status: Offline
Posts: 3142

Posted: 09/Apr/2008 at 7:44pm

Originally posted by Mohan

Bubble,
Is the KIWI having the highest yield differential to the JPY ?

Yes, in front line currencies.

Other than that, ISK (15%) and TRY (18% i think) have very high yields. However, with these there is a chance of a capital loss, incase these countries default.

You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!

IP Logged

rakeshmehta48
Senior Member

Joined: 01/Dec/2007
Location: United Arab Emirates
Online Status: Offline
Posts: 544

Posted: 09/Apr/2008 at 4:03am

BOJ deputy Gov Watanabe has said that:

Intervention to smooth volatile forex moves can be justified.

Who knows? They might have intervened already. JPY spot has moved from a high of 95.71 recently to 101.71 today

Fund Management is Most Important

IP Logged

<< Prev Page of 11 Next >>

Printable version

Forum Jump

You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

This page was generated in 0.047 seconds.

Bookmark this Page

Most Participated Topic

Join Theequitydesk.com Today!

It’s easy to Join and it’s free.

Here's why members would love to be a part of theequitydesk.com

Equity Desk focuses on why to buy shares and invest in share rather than what to buy.
Live discussion forum wherein members can discuss the current Indian share Market trend, BSE Sensex or the Nifty Index.
Have huge cache of information on Indian and World Share Market.
Analysis of Indian stock market, Global events, Investing insights, portfolio management strategies and thoughts,
Meet investors from round the globe check their investing strategies share experiences and learn for their experiences on stocks and shares, evaluate opinions on investing in India.

Register now while it’s free!

Already a member? Close this window and log in.

Join Theequitydesk.com Today!

Here's why members would love to be a part of theequitydesk.com

Join Us Close