01 May 2007

Yen/USD Rate

What makes it so Important?

USD$1 = xxx.xxx YEN shows how much Yen can be converted from USD$1. When Yen is relatively stronger than USD the situation is not good for Yen Carry Traders.

Here is the simple analogy to understand basic of Yen Carry Trades. Imagine you borrow interest free money (Yen) to invest in US market. At the beginning, for every 125 Yen you get USD$1. In situation of your investment yields about 10% you shall gain 10% (USD$1.10) because it is interest free. However, in one very fine day, the Yen becomes relatively stronger than before. Let say you converted back USD$1.10 with USD$1 = 110 Yen rate, you receive 121 Yen and you still loss of 4 Yen.

So what is the point? You will not wait the Yen to become stronger before converting it to Yen to avoid unnecessary losses. You will then sell all your investment before the situation turns sour which is unfavored to the market.

House Number

01 AmFraser
08 CS
12 Lim&Tan
20 Philip
21 KimEng
25 Daiwa
26 BNP
31 DMG
35 SBI E2
36 Fortis Clearing
37 Lehman Brothers
39 Instinet Singapore
71 Nomura
72 Daiwa
73 Macquarie
77 ABN
78 Merrill Lynch
79 JPM
82 MS
83 Citigroup
84 UBS
86 DBSV Online
87 Westcomb
Thanks ccloh for providing my long lost house number list


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