Zero financing

As if forgetting all the lessons of recent history, it appears many hedge fund managers are again piling back into the "yen carry trade" the same trade rumoured to lie behind the demise of hedge fund behemoth Long Term Capital Management in 1998. With short-term interest rates in Japan at close to zero, banks and hedge funds are again financing positions in higher-yielding currencies by borrowing in yen. This "yen carry trade", as it is called, helps keep the yen cheap.

The strategy assumes

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: