Once the music stops to play – Japan and its JPY have a long history in FX interventions. But carry traders currently should not only worry about renewed FX interventions to support the value of the JPY, also the risk of an increase in general FX volatility and a shrinking yield differencial are real threats.
If a G4 currency according to its real and nominal effective exchange rate gets discounted that much, the risk of a sudden big appreciation should not be underestimated. #currency
Chart via Reuters
