borrowing japanese yen ?

[Vladimir]

what guide lines are there in borrowing japanese yen and investing in the u.s.a. ?

 

[marksa]

might I suggest you google "carry trade" USD JPY. Not for the faint hearted. Unless you are a "Market participant" in other words able to prove to a bank that you know what you are talking about, the it may be difficult for you to get the JPY Loan from an Irish Bank.

I would suggest that if you are going to do this, to ensure you cover the fx risk at the start of your trade otherwise the volatility on this currency pairing could leave you high and dry.

 

[room305]

what guide lines are there in borrowing japanese yen and investing in the u.s.a. ?

I would say "don't do it unless you know what you're doing". The amount of retail investors jumping into the carry-trade lark (many Polish mortgages are now issued in Yen) and the aversion of Japanese people to holding Yen deposit accounts (so playing the carry trade themselves) tells me some day the Yen is going to catch a bid, rally about 40% against other currencies and leave the retail investors high-and-dry.

No telling when that will be of course.

 

[bigred]

might I suggest you google "carry trade" USD JPY. Not for the faint hearted. Unless you are a "Market participant" in other words able to prove to a bank that you know what you are talking about, the it may be difficult for you to get the JPY Loan from an Irish Bank.

I would suggest that if you are going to do this, to ensure you cover the fx risk at the start of your trade otherwise the volatility on this currency pairing could leave you high and dry.

If you 'cover' i.e. hedge the fx risk away you will put you back in the same position as if you had borrowed USD to begin with. 'Covered interest rate arbitrage' will not allow you take risk free advantage of lower interest rates in a different currecy e.g. you borrow JPY 1,000,000 at say 0.5% and sell it spot for USD (1m/119.5 = USD8,368). You invest the USD at say 5% fixed for 1 year USD 8,368 * 1.05 = 8,786. At the same time you agree to forward sell these USD proceeds back to JPY to repay the JPY loan.. the clever bit! is that the forward fx rate will adjust for the interest rate differential so that you end up with just enough JPY to pay back the JPY loan so no free luch unfortunately. The only way to take advantage of the low JPY interest rate is to also run the fx risk and hope you dont lose more on the fx than you are saving on the borrowing cost.