Comments on: O$P$ – who charges higher rates than NZD? http://caviarnwine.wordpress.com/2007/09/11/20/ Finance • Career • Travel • Lifestyle Thu, 10 Dec 2009 17:20:40 +0000 http://wordpress.com/ hourly 1 By: caviarwine http://caviarnwine.wordpress.com/2007/09/11/20/#comment-113 caviarwine Fri, 27 Mar 2009 07:46:01 +0000 http://caviarnwine.wordpress.com/2007/09/11/20/#comment-113 Yes, it is generally (STRESS: generally) a good idea to borrow in JPY and invest in higher-yielding currencies like AUD or NZD and ride on the "yen carrytrade" wave. However, you need to be very nimble as the unfolding of the yen carrytrade can lead to severe and painful losses. I know of friends who bought AUD at 7~ish yield 12 months ago and close to par with the USD. Now, AUD hovers around the 3% yield mark and accordingly, its value has depreciated substantially against major currencies like USD and GBP i.e. you would suffer heavy FX losses. For the long run, my personal view is commodity-backed currencies like AUD and NZD should trend upwards once the bull/boom cycle swings up (perhaps in another few more quarters). If you have kids who plan to study or if you plan to retire in the Southern Hemisphere, then you generally do not have to worry about FX losses. CAVEAR EMPTOR Yes, it is generally (STRESS: generally) a good idea to borrow in JPY and invest in higher-yielding currencies like AUD or NZD and ride on the “yen carrytrade” wave.

However, you need to be very nimble as the unfolding of the yen carrytrade can lead to severe and painful losses. I know of friends who bought AUD at 7~ish yield 12 months ago and close to par with the USD. Now, AUD hovers around the 3% yield mark and accordingly, its value has depreciated substantially against major currencies like USD and GBP i.e. you would suffer heavy FX losses.

For the long run, my personal view is commodity-backed currencies like AUD and NZD should trend upwards once the bull/boom cycle swings up (perhaps in another few more quarters). If you have kids who plan to study or if you plan to retire in the Southern Hemisphere, then you generally do not have to worry about FX losses.

CAVEAR EMPTOR

]]> By: roger http://caviarnwine.wordpress.com/2007/09/11/20/#comment-112 roger Sat, 21 Mar 2009 20:21:37 +0000 http://caviarnwine.wordpress.com/2007/09/11/20/#comment-112 Hi is it a good or bad idea to borrow money from a Japan Bank and tranfer to NZ Bank? Japan has very low interest rates for borrowing. Hi is it a good or bad idea to borrow money from a Japan Bank and tranfer to NZ Bank? Japan has very low interest rates for borrowing.

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