Theres plenty of anal-ysts telling us its all over for the carry trade.
But is it?
The interest rate arbitrage has not gone away, and may infact increase on some pairs (NZD, GBP to raise).
I dont believe for a minute that the yen will keep getting stronger to no end. The money made on the carry trade is just too easy.
Question is, at what point will the yen stop rising? As with any market, valuations reach a certain point where investors start buying.
It was around a year ago that I suggested a good play might be AUDJPY around 82. Even after huge falls last week, its @ 90 now (ignoring the mega interest received). And the interest rate differential has increased since then.