Carry trades and cave dwellers

8 August 2024 Carry trades and cave dwellers Hong Kong Financial markets have been focused over the past week on the yen carry trade unwind. This is entirely understandable given the roller coaster market action in Tokyo. But the reality is that this has been a correction driven by technical factors, the selling of leveraged positions, rather than anything fundamental. Exhibit 1: Topix and Yen/US$2,200 2,300 2,400 2,500 2,600 2,700 2,800 2,900 3,000 140 145 150 155 160 165 Topix Yen/US$ (RHS) Jan-24 Feb-24 ...