Carry Trade Is Powering On as Investors Sidestep Yen’s Gains

Emerging-market carry trades continued through 2026 despite joint US-Japan currency intervention aimed at reducing demand for yen-funded positions. Investors shifted capital into alternative currency pairs after the intervention, according to trading data. Carry trades, which involve borrowing in low-interest currencies to invest in higher-yielding assets, remained active in emerging markets.

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