Yen’s Rally Gains Steam With Global Carry Trades in the Balance
- Dollar-yen breaks below 100-day moving average and 155 level
- A BOJ rate hike is seen as one key to ending yen weakness
This article is for subscribers only.
A rapid move higher for Japan’s yen showed little sign of slowing on Wednesday, barreling through key levels against the US dollar and other peers.
The currency rose more than 1% against the greenback after breaking through the key psychological threshold of 155 per dollar and blowing past the pair’s 100-day moving average for the first time since mid-March. Analysts attribute the shift to an unwind in global carry trades, which use low-yielding currencies like the yen to fund investments in higher yielders such as Mexico’s peso or the Australian and New Zealand dollars.