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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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From: Haim R. Branisteanu	2/10/2007 2:48:10 PM
	of 110194

Carry Trades at the G7 Message 23271995 In press briefings after their joint statement, some G7 finance ministers and central bankers highlighted those statements with coordinated language that made clear the yen-funded carry trade was their primary target. "We want markets to be aware of the risks in one-way bets in general," said European Central Bank President Jean-Claude Trichet. "We, in particular, think of carry trades, but not only carry trades." At exactly the same time, but in a different room, Germany's finance minister delivered a nearly-identical warning. "We want to strictly stick to one language," Peer Steinbrueck said. "It's the common view of finance ministers and central bankers that markets should be aware of risks stemming from one-sided bets, particularly on foreign exchange markets. This addresses the problem linked in particular to carry trades." Japanese Minister of Finance Koji Omi added his voice to the chorus. "Market participants ought to be aware that acting in one direction could bring a risk," he said, referring to some traders view that yen weakness is a sure bet.

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