Yen carry trade Under Pressure
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Treasury Secretary Scott Bessent says his Japan ties give him insight into the BOJ, daring traders to bet against the yen.
By Amanda Cooper LONDON, Sept 9 (Reuters) - The Japanese yen traded at seven-month highs on Wednesday, keeping the dollar under pressure, as traders grappled with oil prices breaking above $100 per barrel in the face of a widening war in the Middle East.
USD/JPY declines 0.39% on Wednesday and trades around 153.40 at the time of writing. The Japanese Yen (JPY) benefits from renewed demand as investors increase their bets on further monetary tightening by the Bank of Japan (BoJ).
Finance ministry data showed that Japan's official foreign reserves stand at $1.207 trillion, down from July's figure of $1.287 trillion.
By Jiaxing Li HONG KONG, Sept 8 (Reuters) - The Japanese yen climbed to fresh seven-month highs against the U.S. dollar on Tuesday, as traders continued to unwind short positions amid growing bets of a Bank of Japan interest-rate hike while the dollar was subdued ahead of CPI data this week.
BNY’s Geoff Yu notes USD/JPY slipping back below 153 as markets heed U.S. Treasury Secretary Scott Bessent’s warning on testing Japanese Yen intervention. The report stresses that a sustained move depends on a broader Bank of Japan tightening cycle.
Bessent publicly declared he has "asymmetric information" on yen intervention and dared currency traders to bet against him. A 29-year-old Bessent convinced Soros to short the pound in 1992, earning the firm $1 billion when Britain exited the ERM.
The dollar index (DXY00 ) fell to a 2-week low on Tuesday and finished down by -0.38%. The dollar retreated on Tuesday amid strength in the yen, which rallied to a 6.5-month high against the dollar. The dollar recovered from its worst level today after crude oil prices jumped
The yen gained 3.3% in five sessions, fueled by a record $99.6B joint US-Japan intervention and Bank of Japan rate hike expectations for
A rise in Japanese interest rates may halt the yen’s slide but set off a disorderly unwinding of the so-called “carry trade.”
The yen carry trade lets investors borrow cheaply in Japan and put the money into higher-yielding currencies and riskier assets around the world.