With Japan’s benchmark interest rate holding steady at 0.1 percent for over two years now, investors in Japan are turning to foreign investments in the search for better yields. Investors outside Japan are also entering into carry trades selling the yen in order to buy other, higher-yielding currencies.
“The prospect of any rate rise in Japan is so far away that at some point over the next year it will return as a funding currency,†noted Greg Gibbs, a currency strategist at RBS Australia in Sydney.
Source: Bloomberg
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