Bank of Japan's rate hike attracts investors for yen carry trades due to Japan's lowest G10 interest rates.
Despite Bank of Japan's rate hike after 17 years, low-interest rates in Japan continue to attract investors for yen carry trades, as Japan still has the lowest interest rates among G10 countries. Investors borrow in yen with low interest rates and invest in higher-yielding currencies, driving the yen lower. The Bank of Japan's dovish tone and expectations of maintaining "accommodative financial conditions" encourage carry trades.
March 19, 2024
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