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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 11 4:00 PM EST

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To: pater tenebrarum who wrote (37223)	1/11/2000 8:55:00 PM
From: Don Green	Read Replies (1) of 99985

Yen-Carry Trades On Rise As Year Opens: Nomura Wednesday, January 12, 2000 TOKYO (Nikkei)--Yen-carry trades are accelerating once again after coming to a halt in December, the latest data compiled by Nomura Securities Co. (8604) suggests. Yen-carry trades -- in which hedge funds and other investors borrow yen to finance positions in higher yielding currencies -- swelled to 8 billion dollars in the first week of January, from zero in December, Nomura estimates. The surge in yen-carry trades stems in part from the recent rebound in the euro, which is pushing hedge funds to shift their borrowing to the yen. The yen-carry trades are also tied to the emerging market view that the yen will soften ahead of a meeting of Group of Seven central bank governors and finance ministers in Tokyo on Jan. 22, Nomura believes. Yen-carry trades tend to reinforce a weaker yen and a stronger dollar because the borrowed funds are typically put into dollar-denominated assets. The monthly balance of yen-carry trades ranged from several billion dollars to zero in the second half of 1999, off from a peak of 42 billion dollars in June 1998. (The Nikkei Financial Daily Wednesday edition)

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