Xiaohuang: DOORM, what is the impact of yen depreciation on international capital carry trades?
DOORM: Xiaohuang, yen depreciation has a positive impact on international capital carry trades. Due to the depreciation, the cost of borrowing yen is further reduced, allowing investors to borrow yen at a lower cost and then invest the funds in higher-yielding assets to earn a higher interest rate differential. Additionally, yen depreciation increases the gains from exchange rate movements, further enhancing the attractiveness of carry trades.
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