rss  atom

Article Home > Topics > Financial, etc.
Translate  日本語  |  中文

Recent depreciation of the yen is abnormal: BIS warns

7, 12. 2007

   The Bank for International Settlements, in Basel, Switzerland, warned in its latest annual report that recent depreciation of the yen was abnormal. It said that investors who have raised funds in yen should remember time when the yen shot up in 1998. The annual report covering the period between April 2006 and March 2007 was made public by BIS at its annual meeting held on June 24, 2007. It was reported the same day by the Reuters news agency. The report noted the depreciation of the yen was brought about by "yen carry trade" against the background of wide differences between the monetary interest rates of Japan and those of the U.S. and Europe.

   Malcolm Knight, BIS General Manager, told reporters after the meeting that the carry trade would become insignificant because of global rise in monetary interest rates. Taking into consideration the worldwide movement toward the normalization of interest rates, carry trade loses attractiveness, he explained. Carry trade is a method of earning profit by raising funds in yen and other currencies at low interest rates and managing by exchanging then to other currencies of higher interest rates. It is an important way of management or procurement of funds for hedge funds.

Recent Stories in this category