Sharp volatility in the stock market has triggered sharp moves in carry trades.
Most of the Japanese Yen crosses fell to fresh lows in early European trading but they managed to recover all of those losses and then some throughout late European and US trading sessions. Japanese economic data was mixed with machine orders and CGPI beating expectations but the trade numbers fell short of expectations. The recent Yen strength is expected to take a big toll on exports. Last year, Japanese automaker Toyota unseated Ford as the world’s number 2 automaker by sales. If the Yen remains strong, we would not be surprise to see Ford steal the title back from Toyota in 2008.