Yen Suffers as Carry Trading Resumes

Following a tumultuous period that stemmed from mortgage problems in the US, the global markets are finally calming down. While this is good news for most, the Japanese yen is weakening as a result. Why the change? Investors are feeling more confident about high-yielding ventures once again, leading them to pull out of the yen and continue with high-risk carry trading. Reuters reports:

While confidence in global credit markets has by no means been fully restored and fears remain that short-term liquidity could dry up, investors across a range of asset classes felt bold enough to shun safe-havens and seek higher returns.

Read more: Yen lower as calm returns to markets