Best Money

Fourth-quarter earnings at CIBC rose despite the bank taking a big charge related to fallout from the U.S. subprime mortgage market and the global credit crunch. The bank said Thursday it made $884 million for the fourth quarter, or $2.53 a share. In the same quarter of last year, it made $819 million, or $2.32 a share. CIBC took a $463-million pre-tax charge on write-downs on collateralized debt obligations and residential mortgage-backed securities related to the U.S. residential mortgage...

BOJ spurs carry trade

To no ones surprise, the Bank of Japan has announced that it would maintain Japanese interest rates at the current level of .25%. Carry traders seized upon the opportunity to continue borrowing Yen at near-record lows, and selling the Japanese currency in favor of higher-yielding alternatives. In fact, the news was met with such gusto that the Euro was almost immediately propelled to an all-time high against the Yen, which continues to plumb the depths of forex disfavor. At this point, analysts and economists are feeling fairly certain that Japanese interest rates will remain at current levels in the near-term, a sentiment which supports the viability of the carry trade. Forbes reports:

One analyst commented: with BoJ expectations stable, currency market volatility subsiding and risk aversion abating, carry trades are recovering, keeping the yen under pressure. He sees no immediate catalyst for a yen recovery.

Read More: http://www.forbes.com/markets/feeds/afx/2007/04/10/afx3597315.html