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Yen Strength Forces Carry Trade Shift

By Markets Desk · 2026-09-09 · Updated 2026-09-09 16:03 UTC
A stack of foreign currency banknotes and a globe
Illustration: Tradingbird

Traders are pivoting from the yen to the Swiss franc and Canadian dollar as carry trade funding sources, but GN markets/fx (en-US) warns that these alternatives suffer from significantly lower liquidity. This structural weakness complicates the shift, as lower trading volumes increase the risk during sudden market volatility spikes.

  • GN markets/fx (en-US) highlights a critical liquidity constraint, noting that the Swiss franc and Canadian dollar have trading volumes roughly one-third the size of the yen. This reduced depth raises concerns that sharp sentiment shifts could be more difficult to manage in these alternative funding currencies.

    Source: GN markets/fx (en-US)

  • The Japanese yen reached a peak, ending its dominance in low-yield funding strategies. Traders now pivot to the Swiss franc and Canadian dollar amid rising volatility.

    Source: GN markets/fx (en-US)
Based on reporting by GN markets/fx (en-US) and GN markets/fx (en-US), compiled by the Tradingbird desk.

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