GBP JPY + carry trade?

Question

There were 2 huge drops in GBPJPY, esp in 1992. Anyone knows what caused it?

Does Yen really carry trades? Based on historical data, maybe not. Any comments?

When doing carry trades, when do you decide when to swtich back to the base currency?

Answer 1

I dont know the reason of huge drops in 1992. that time i was in school ;)

The current rate of GBP/JPY  is 210.91/96 at 06:37:57 with a change of -0.11%. I think rolling over Yen can be a good idea but not for more than 1 month. because current market situations are quite volatile and due to the oil and fuel price volatilities there is a major setback in major economies.

While carrying trade for more than one month the things i consider are:

1. Base currencies economy structure.

2. government plans and polices.

3. Currency long term performance.

4. history and major setbacks and their causes.