Takeshi Kamada CIA Japan. Takeshi Kamada, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage possibilities. He wants to invest $5,000,000 or its yen equivalent, in a covered interest arbitrage between U.S. dollars and Japanese yen. He faced the following exchange rate and interest rate quotes.

Arbitrage funds available $5,000,000

Spot rate (JPY/$) 118.60

180-day forward rate (JPY/$) 117.80

180-day U.S. dollar interest rate 4.800 %

180-day Japanese yen interest rate 3.400 %