USDJPY Carry Trade EXPOSED!

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Now it makes sense why the Fed is trying to keep interest rates where they are! Any yields on the 10 Yr T-note above 5% has the ability to cause the carry trade to unravel. How do I know? I ran a neural net model through USDJPY and bond data this morning and came up the the following curve.

USDJPY Carry Trade Exposed

It’s plain to see that we’re teetering on the edge…

  • Tibor

    Hi,

    I have found your blog on Friday, read it through that evening, first used YALE on Saturday, so I am not so sophisticated in it, but I would like to know how this chart came up. Any solutions or tips would be welcome even in private mail.

    Fascinating blog, congratulations! Keep up the good work!

    Bye,

    Tibor

  • http://www.neuralmarkettrends.com Tom

    Tibor: I created this model rather quickly using 10yr T-note yields, S&P500 closing data, CRB index, and USDJPY. I then ran it through a multilayer preceptron neural net.

    If you were to run it again, I suggest using the Gaussian Regression learner, it yields a slightly different curve, which I’ll post later today.