Carry trade worth US$4 trillion begins to unwind


New direction: A money changer in central Tokyo. Analysts expect a gradual flow of capital back into Japan, now that the BoJ has raised interest rates. — AFP

TOKYO: Japan’s investors are starting to lose their decades-long infatuation with overseas assets.

With US$4.4 trillion invested abroad, an amount larger than India’s economy, the speed and size of any pull back has the power to disrupt global markets. Even as the gap in rates between Japan and other countries has narrowed, the inflows have been a trickle rather than the flood some investors have feared.

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