Unwinding of the carry trade not so scary?
May 8, 2007
By Ken Worsley
On Sunday, Vice Finance Minister for International Affairs Hiroshi Watanabe came out and said that not only has the size of the so-called ‘carry trade’ been exaggerated, but that concerns over its unwinding has been overblown. Although Watanabe agreed that the carry trade might be valued at $100 billion, he feels that this is such a significantly small portion of the annual $500 trillion worth of trade in currency markets per year that the unloading of those funds would not have a significant impact on Japan’s economy:
It could move the market somewhat for one day, but the world won’t go upside down…The size and the impact of unwinding is over-exaggerated. That’s my understanding.
Watanabe declined to make comments regarding the effect of economic fundamentals on yen-based exchange rates, which we have to say is a wise move for anyone in the government.
Still, if he is right: one day of fun will be better than nothing.
Filed Under Carry Trade, Exchange Rates
Social Bookmarks:
Related Posts:
Get started in the yen carry trade!
Bank of Japan Governor Toshihiko Fukui Stays Talkative
Yen/Dollar Swings: All About the Carry Trade?
Bank of Japan: Damned if you do…
The Nikkei Gives Us the “Told Ya So” Piece We’ve Been Waiting For
Comments
One Response to “Unwinding of the carry trade not so scary?”
Got something to say?
Last Month's Top 5 Stories
1. Fukuda steps down2. Number of foreign workers at Japanese firms leaps
3. Subprime buyins: Nomura at Lehman’s, Mitsubishi at Morgan Stanley
4. Bank of Japan: savings deposits exceed loan balances by a record 145 trillion yen
5. Sapporo Breweries to be Japan’s first firm to label products with their carbon footprint
Upcoming Economic Reports
October 1BOJ Tankan Survey
September Auto Sales
October 7
September Foreign Reserves
October 8
September Economy Watchers Survey
September Bankruptcies
October 9
August Machinery Orders
October 10
September Bank Loans
Jobs in Japan
From the Blogosphere
Japanese Wages Fall Again In June at Japan Economy Watch
Members of a Nation State at Neojaponisme
More Comments on Wai-Wai at Let's Japan
Will the real Ozawa please stand up? at Observing Japan
Posts on Recent Economic Reports
September 25Japan’s convenience stores loving the Taspo card; sales up 7.5% in August
September 24
Japan supermarket sales down 1.0% in August
September 22
Japan’s consumer confidence hits all-time low for third straight month in August
September 21
Central Tokyo office vacancies up for seventh straight month in August
September 19
Japan department store sales down 3.1% in August
View more economic reports »
Our Links
- Asia Business Intelligence
- Bank of Japan Statictics
- Cabinet Office English Homepage
- Center for Strategic and International Studies: Audio, Video & Transcripts
- China Business Daily
- Claus Vistesen’s Blog
- Columbia University Center on Japanese Economy and Business
- Council on Economic and Fiscal Policy
- Economic and Social Research Institute
- From the inside, looking in
- Global Talk 21
- Japan Business Federation - Nippon Keidanren
- Japan Considered
- Japan Economy Watch
- Japan Forum on International Relations
- Japan Inc
- Japan Labour Force Survey
- Japan Law Blog
- Japan Marketing News
- Japan News Review
- Japan Productivity Center
- JETRO - Japan External Trade Organization
- Ministry of Economy, Trade and Industry - Online Statistics
- Ministry of Finance
- Ministry of Finance - Policy Research Institute
- Ministry of Foreign Affairs - Economic Affairs Page
- Nikkei Real Estate Market Report
- NYU - Center for Japan-US Business and Economic Studies
- Observing Japan
- OECD - Japan Page
- Prime Minister and his Cabinet
- Seeking Alpha
- Small and Medium Enterprise Agency
- Steven Towns’ Blog
- Tokyo Stock Exchange
- Trans-Pacific Radio
- What Japan Thinks
- World Federation of Exchanges
Archives
Build the Network!
That is BS.
The corect number: $100 X 10 = $1.000.000.000.000
Watanabe declined to make comments regarding the effect
of economic fundamentals….?
He is not alowed. Nobody in Japan can do that.
Japan practicise “beggar your neighbor” - or the rest
of the world policy.