Carry Trades Continue to Take Yen Crosses Higher

Weaker than expected leading economic indicators in May sent the Japanese Yen tumbling against the high yielders. The carry trade is alive and kicking with AUD/JPY and NZD/JPY hitting fresh decade highs on an intraday basis.

Risk aversion is low and as long as it remains low, high yielding currency pairs will continue to benefit. The only thing that could put an end to this rally is a major sell-off in the equity markets around the world or some sort of significant geopolitical event. The Japanese Yen will continue to be weighed down by the attractiveness of higher yields offer elsewhere and by the reluctance of domestic companies to pass on its profits to their employees.