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’Fujii: Yen intervention could ‘destroy a free economy’
For a septuagenarian, Japan’s new finance minister, Hirohisa Fujii, packs a punch, single-handedly driving up the yen on Wednesday – his first day on the job.
As the FT reported on Thursday, the yen
What being like the yen actually means for QE currencies
Dollar doomsayers were probably out in force on Wednesday.
Early in the session, the dollar index fell to its lowest level in almost a year, while the dollar hit its lowest level against the euro since December 2008.
The new carry currency?
The question’s being asked after the 3-month US dollar LIBOR rate fell to a record low of 0.299 per cent, leaving it some way below the Yen and the Swiss franc.
Bonfire of the carry trades
The below graph from Brad Setser at CFR. A rebased look at the high carry currency unwind:
Related links:
Asian pain: The ghosts of 1997-98 return – FT Alphaville
Currencies and politics: When the twain meets
The direction of key currencies and carry trades is anybody’s guess right now, but as politics takes precedence over other factors in quite a few major currencies, here’s a romp through some of the main events affecting money markets and carry trade punters:
Mrs Watanabe and the carry trade’s comeback
As debate rages among economists and policy wonks over whether Japan should or should not raise interest rates, the yen has slipped and the carry trade has roared back to life. Once again, notes Lex, it has paid handsomely to follow the investment genius of Japanese housewives.
Carry on regardless?
Amid much hubbub, it looks as though foreign exchange traders’ much-vaunted “carry trade” practice is coming back, notes John Authers in his Short View column in the FT.
Late last month and early this,
Trading frenzy takes its toll on markets
Financial markets swung wildly on Thursday in volatile trading marked by further selling of equities and fears about an unravelling of the global carry trade. An unexpected rebound in US manufacturing helped steady nerves after heavy early selling of equities that was apparently triggered by a strengthening of the yen.
The contrarian view: “Mischievous little buggers will run amok..”
Don’t get too confident. A recent visitor to London — Cassandra, of the Cassandra does Tokyo blog — has left feeling apoplectic, demanding action against those “hordes of mischievous and clever speculators”