[houssam1012]

The trade proved so lucrative that by early 2007 it was estimated that as much as $1 trillion may have been staked on the yen carry trade.
However, thanks to the arrival of the global financial crisis in the summer of 2007, these risky, leveraged bets, started to be unwound, marking the beginning of the end of the yen carry trade. The unwinding of hundreds of millions of dollars worth of investments created tremendous demand for Japanese yen, since in order to repay the low-interest loans, foreign currencies first had to be converted into yen. This caused the Japanese currency to rise considerably against other world currencies.

It now looks as though the unwinding process has come to an end and with it the support for the Japanese currency.

The end of the unwinding of the yen carry trade is no the only reason that the trend change on the chart above is potentially highly significant. There are a host of other factors that are bearish for the Japanese currency.

[houssam1012]

The trade proved so lucrative that by early 2007 it was estimated that as much as $1 trillion may have been staked on the yen carry trade.
However, thanks to the arrival of the global financial crisis in the summer of 2007, these risky, leveraged bets, started to be unwound, marking the beginning of the end of the yen carry trade. The unwinding of hundreds of millions of dollars worth of investments created tremendous demand for Japanese yen, since in order to repay the low-interest loans, foreign currencies first had to be converted into yen. This caused the Japanese currency to rise considerably against other world currencies.

It now looks as though the unwinding process has come to an end and with it the support for the Japanese currency.

The end of the unwinding of the yen carry trade is no the only reason that the trend change on the chart above is potentially highly significant. There are a host of other factors that are bearish for the Japanese currency.