Yen carry trades lose ground to franc as Japan, Swiss rates converge

Pressure on Japanese currency wanes as investors eye further easing in Switzerland

20241205N yen notes

The yen has been a popular option for carry trades due to low interest rates in Japan. © Reuters

AOI IIDA, Nikkei staff writer

TOKYO -- Investors are increasingly turning to the franc for carry trades amid speculation that the Swiss policy rate could be headed below Japan's, a trend that could ease selling pressure on the yen.

Carry trades involve borrowing low-interest currencies to invest in high-interest ones to earn a larger return. The yen and the franc both have been popular options for carry trades, given traditionally low interest rates in Japan and Switzerland.

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