With the stock market closed for Easter, carry trades have extended their rise.
If another shoe does not drop next week, we could see a further rebound, but a rebound does not make a recovery. We continue to stress that the current market environment makes it very difficult for carry trades to recover. It is also the fiscal year end for Japan, which means that repatriation could keep the yen under pressure. Meanwhile there are a lot of Japanese economic data due for release next week and we expect most of them to be Yen positive.
