The Japanese yen’s sharp rally ahead of an expected Bank of Japan interest rate hike next week is disrupting the long-established carry trade, prompting investors to reassess the outlook for the volatile currency, Reuters reported.
Early signs of capital repatriation, expectations of a faster pace of monetary tightening by the BOJ and pressure from the United States are combining to support the yen, which fell to 40-year lows in July and prompted a joint US-Japan intervention.
