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
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