Traders Need to Rethink Yen as a Carry Funding Favorite
- Swiss, Taiwanese currencies may be better carry-trade funders
- Implied yields favor Swiss franc over yen as one metric
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Carry traders would do well to take a second look at funding favorite the yen -- as even at a 20-year low there are better sources to fund the purchase of higher-yielding currencies.
On the surface the yen looks like the perfect well for carry traders to dip into, under pressure from a Bank of Japan determined to keep local yields anchored to the floor even as interest rates around the world push higher. But despite consensus building for further losses -- peers look like better funding options on certain key metrics.