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USD/JPY rallies spur warnings over yen carry trade risks

Rabobank said the dollar strength seen in Q3 coincided with “huge action” in USD/JPY and could spill over into the yen carry trade if it persists.

Reported · Written up by our desk · Major Pairs

Rabobank’s Global Daily noted that FX markets were surprised by dollar strength in Q3, with EUR/USD and GBP/USD staying relatively subdued while USD/JPY saw “huge action” higher, according to FXStreet.

The report warned that if the USD/JPY move continues, it may spill over into the yen carry trade, adding risk to positions that depend on borrowing in yen and investing elsewhere.

Rabobank also said emerging market currencies are slipping against the dollar again, with the exception of CNY, which it treated as a separate case, according to FXStreet.

Latest closeEUR/USD 1.137 ▼0.1%|USD/JPY 157.34 ▼0.1%|GBP/USD 1.325 ▲0.1%

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