Yen's Weakness Drives Carry Trades to New Heights

A recent survey by the Gaitame.com Research Institute found that over 51% of individual retail FX investors in Japan booked profits during the first half of 2026, thanks to a carry trade strategy involving the weak yen. The yen's depreciation allowed investors to sell it and buy high-yielding currencies, resulting in significant swap income. Among profitable investors, 12.1% secured returns between 10-20%, while 9.6% achieved even higher gains of 30% or more.

The survey also revealed that investors' focus has shifted to U.S. and Japanese monetary policy, as well as the ongoing crisis in the Middle East. The majority of respondents (35.1%) expect U.S. monetary policy to be a key driver of market trends in the second half of 2026.

Interestingly, investor sentiment remains bearish on the yen, with 55.8% wanting to sell it due to concerns over low policy interest rates and fiscal deterioration in Japan.