Yen's Slide Revives Carry Trades, But Risks Rise

The yen's recent slide has revived interest in carry trades, where investors borrow yen at low interest rates to invest in other assets that offer higher returns.

This strategy is attractive because of the wide interest-rate gap between Japan and other countries, making borrowing yen cheap.

However, as traders rebuild bets against the Japanese currency, this strategy becomes riskier, especially with Tokyo and Washington's willingness to intervene in the foreign exchange market to support the yen.