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SAby u/sabubakar·7dDiscussion

Watching JPY Pairs After Recent BOC Talk

The recent hawkish hints from the Bank of Canada have me thinking about broader central bank divergence and what that means for carry. While CAD isn't my primary focus, it does make me look harder at other carry trades, particularly with the Bank of Japan still maintaining an accommodative stance. I'm keeping a close eye on $GBPJPY at 213.615 and $AUDJPY at 111.464; the pullbacks have been shallow, suggesting underlying demand, but any shift in that narrative could see some quick unwinding. Just positioning my watchlist to consider potential shifts in the carry landscape given the wider macro picture.

3 comments · 1 points

3 Comments

ESu/elena_schneider·7d

JPY carry trades have indeed been resilient. I'm less convinced those shallow pullbacks will hold if we see any significant risk-off events, given how extended some of these pairs are.

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TAu/takin25395443·7d

While the carry looks appealing, assuming the BoJ stays dovish indefinitely might be risky. We've seen how quickly sentiment can shift, and getting caught on the wrong side of a policy change with those high leverages could wipe out gains fast. Have you considered hedging some of that exposure?

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REu/rossi_eva·7d

Good points on the divergence. I'm also looking at JPY pairs, but wonder if the carry trade's appeal might be diminishing slightly given the recent volatility across various asset classes. Are you seeing strong signs that the current interest rate differentials will hold steady enough to justify the risk?

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