Rabobank Warns of Potential Yen Carry Trade Fallout
The USD/JPY pair saw significant action in Q3, with the Dollar strengthening against the Yen. This move has left FX markets surprised and may have implications for the Yen Carry Trade if it continues.
Rabobank's Global Daily notes that while EUR/USD and GBP/USD were relatively subdued during this period, USD/JPY saw a notable increase in value.
The report warns that emerging market FX is also slipping against the Dollar, except for CNY, which is treated as a separate case. This trend has left some markets caught off guard, particularly those expecting a weaker USD.