Carry trades | 21 Tháng Chín 2022

21 Tháng Chín 2022, USD/JPY

Carry trades

USDJPY trading plan:

The Federal Reserve will be raising rates again and by as much as a full 0.75 point. The following day, the Bank of Japan is certain to cement its standing as the lone global dove in developed markets by sticking to its negative rates. The difference in yields between the two markets will hit 300 basis points. The blow to the already battered yen, that's down 20 percent versus the dollar this year, should be cause for concern for the Bank of Japan. Yield-seeking Japanese households have been notable absentees from global currency markets during the pandemic years as central banks pushed rates towards zero, squishing spreads between currencies and killing the pervasive yen-funded "carry" trade.

Investment idea: buy 143.40 and take profit 143.90.

David Johnson
Analyst of «FreshForex» company
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