Tag

Japan

Jul 22

Why the Japanese Yen Carry Trade Matters

By Blog
One thread from the complex sweater that is global finance to keep an eye on is the reversal of the Japanese yen carry trade. As a refresher, for decades investors have been conditioned to borrow in cheap, low-interest yen, buy foreign assets (U.S. assets) that yield or earn more, then eventually sell them and pay off those yen loans at a profit. A declining yen gives the carry trade an additional boost to profits. Sell dollar assets at higher prices, convert those dollars into a cheaper yen (getting more yen), then pay off the loan with money left over from…
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Mar 17

Remembering Japan – No Sirens

By Blog
In the decade leading up to the 1989 peak in the Japanese stock market, there was little to complain about. Almost everybody with shares of stock or real estate was watching their net worth rise, month after month, nearly uninterrupted. It became so easy to make money in the stock market that work ethic declined, leisure time increased, and many corporations found it easier and more profitable to augment their core business activities with stock market activity. According to Edward Chancellor in “Devil Take the Hindmost”, “Japanese politicians were not solely guided by public duty in their desire to support…
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