Carry on trading

Structured products

Unwinding of yen carry trade positions by proprietary trading desks, hedge funds and Japanese retail traders over the past few months has had a significant impact on some of the newer investors in the strategy, namely exchange-traded funds (ETFs) and over-the-counter structured products.

The carry trade involves borrowing in the currency of a country with low interest rates, such as the yen, and investing in higher-yielding currencies, such as the Australian or New Zealand dollar. Investors p