As European insurers consider ways to survive so-called ‘Japanification' – the possibility of zero bound rates for years on end – an obvious place to look is Japan itself and the foreign exchange carry trade that Japanese firms employed to boost yields through the 1990s and 2000s.
The strategy was simple and effective. Firms bought assets from places such as Brazil and Australia where interest rates were higher than at home, left forex and interest rate risk unhedged and benefited from the
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