Gavekal Capital: Speculators Desperately Trying to Push the Yen Lower to Keep the Carry Trade Alive

Tuesday, November 26, 2013

Speculators Desperately Trying to Push the Yen Lower to Keep the Carry Trade Alive

It seems a (risk on) yen funded carry trade has been one of the main drivers of stocks over the last few years, but is time running out or are we just getting started as the yen breaks to new lows against the euro? Speculator positioning, being the most short the yen since 2007, would have us believing in the former. We also note that public opinion on the yen is the most negative since early 2013, when the BOJ first switched its printers to turbo mode.

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