The yen carry trade has become a “ticking time bomb” for hedge funds and other leveraged investors, with the potential for a sharp and disorderly unwind, according to a report by Bloomberg citing a note from BCA Research.
Analysts at BCA have warned that the widely used strategy – borrowing in Japan’s low-yielding currency to invest in higher-return assets elsewhere – could unravel rapidly if global risk assets weaken or the yen begins to strengthen. Such dynamics have previously triggered abrup...
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