The Dow rose 100 points yesterday and 100 points today but carry trades have continued to struggle.
USD/JPY, AUD/JPY and NZD/JPY have not participated in the rally, leaving EUR/JPY, CAD/JPY and GBP/JPY the only ones at the party. We continue to believe that carry traders need to be particularly selective because the current market environment is not conducive to a carry trade rally. Japanese economic data was stronger than expected with both corporate service prices and small business confidence beating expectations. There will be no Japanese economic data released this evening.
