Japanese Yen Carry Trades Continue to Hold Near Highs

The prospect of a rate hike by the Bank of England tomorrow, one from the European Central Bank in June and steady rates in the US until the end of the year is keeping carry trades near their highs.

Yen crosses are continuing to move in lockstep with the Dow and there is no reason for that to change anytime soon. Leading indicators improved in the month of March, but the coincident indicator deteriorated indicating that optimism about future conditions are improving, but sentiment on current conditions is not. Washington is stepping up its pressure on China by conducting hearings on currency manipulation. Read more about this in our Emerging Market China Focus.