# Explainer: What is the yen carry trade?

> Talk of further Bank of Japan rate rises and Federal Reserve cuts by September drove the yen up about 13% in a month. The move narrowed the yield gap and wiped out the slim gains from pure yen-dollar carry trades.

- Date: 2024-08-07 · published 2024-08-07T12:00:00.000Z
- Category: macro · region Japan · magnitude low
- Page: https://feedsoft.ai/events/29043-explainer-what-is-the-yen-carry-trade
- Commodities: [Japanese Yen (JPY per USD)](https://feedsoft.ai/c/USDJPY.md)

## Why it matters

A narrower rate gap reduces the appeal of borrowing yen to fund dollar assets, which can pull liquidity out of risk markets. Feed-commodity price effects are indirect.

## Read by commodity

- USDJPY: bearish ▼

## Sources

- reuters.com: https://www.reuters.com/markets/asia/what-is-yen-carry-trade-2024-08-07/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.