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Mini-Case Mrs. Watanabe and the Japanese Yen Carry Trade 1.Why are interest rates so low in the traditional core markets of USD and EUR? 2.What

Mini-Case Mrs. Watanabe and the Japanese Yen Carry Trade

1.Why are interest rates so low in the traditional core markets of USD and EUR?

2.What makes this emerging market carry trade so different from traditional forms of uncovered interest arbitrage?

3.Why are many investors shorting the dollar and the euro?

4.What other options, if any, would have been available to Mrs. Watanabe to increase her return on her savings?

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