@Brad_Setser: Just a reminder: there isn't a...

Just a reminder: there isn't a single definition of the yen carry trade. It was many things -- foreign speculators borrowing yen, but also Japanese investments underhedging the foreign assets they hold v yen liabilities.

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For most of the last 2 years Japanese investors hedging a dollar book have had funding costs of close to 6% -

the natural response for those who didn't have to fully hedge was to reduce their hedge ratio (hedged assets lost money, unhedged assets made money on yen weakness)

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So there are in my opinion a set of investors, typically Japanese investors, who still need to close their open long dollar/ short yen positions at some stage -- i.e. pay up for a hedge on their currently unhedged foreign holdings.

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