yen-carry-trade: dead or alive?

...Of late the dollar rose to 97.87 yen from 97.18 yen, while the Australian dollar and New Zealand dollar both rose by more than 1% against the yen on the back of gains in commodities worldwide.

...don’t think that this is a re-start of the fabled carry trade that investors happily rode for ages. After all, volatility in the markets remains high, and the positive returns garnered from buying high-yielding assets using money borrowed at low yields are cannibalized in periods of volatility, when there’s no telling when a currency is going to move in the wrong direction.

Joseph Trevisani, chief market strategist at FX Solutions, says the trade represents a view that perhaps Japan’s economic outlook does not translate to a currency at these levels, and also represents profit-taking from the recent turn in the major currencies. “The prior carry trade, as it was called, took place over a very long time — over several years,” he says. “In the past three days, though? You can’t get a loan for $20 million in the last three days.”

http://blogs.wsj.com/marketbeat/2008/10/30/dollar-rebounds-but-this-isnt-the-carry-trade/