The appreciation of the Japanese Yen has a significant impact on other currencies, and the Arbitrage trading strategy is facing reshuffling

On July 17, Jinshi Data reported that the appreciation of the yen has a significant impact on other currencies, as many investors originally sold the yen to provide funds for carry trades. For trades that rely on slow market movements to profit from interest rate differentials, the rebound of the yen has intensified the risk of forex losses. The yen has been suppressed due to its lowest interest rate globally, becoming the best way to transfer funds into carry trades, and the continuous purchase of bonds by the Bank of Japan has also hit a new low in the yen's exchange rate this year. This situation will change on July 31, when the Bank of Japan will announce an adjustment to its bond purchases. Although bond purchases are expected to continue and may push the yen down in the future, markets that are extremely bearish on the yen in the short term are likely to have a significant reaction. Such adjustments can significantly boost the yen for potentially overcrowded markets, putting pressure on investors' purchased currencies.