Expectations of interest rate cuts by the US Fed also contributed to the dollar's weakness. Sharp moves in the yen do not happen often, which is why it has been a preferred currency for carry trades. The yen must remain weaker if these carry trades have to be profitable. Market watchers said the severe selloff in shares of US-based mega technology giants late last week could also be on account of the reversal of the yen carry trades. Here on, a lot will depend on how much the yen strengthens against the dollar.It is not clear how much money has flown into India as part of yen carry trades.

Source: Economic Times August 05, 2024 11:56 UTC