The euro hit a fresh all-time high against the yen at 149.93 on Monday as the carry trade strategy regained favor in investors~{!/~} eyes.

Japan~{!/~}s ultra-low interest rate attracts investors borrow yen and invest the money in high-yield currency dominated assets. The carry trade lost its lust when the Bank of Japan ended its five-year ultra-loosening monetary policy and signaled to raise interest rate from zero.

Though the Bank of Japan raised its interest rates for the first time in six years on July 14, several BoJ officials and Japan politicians indicated that the central bank will lift rates gradually afterwards. Last week~{!/~}s Japan CPI showed the inflation level in Japan increased much more slowly than expected, further dampening the expectations for a second interest rate hike this year. Growing interest rate differential between the yen and other currencies, especially the euro, attracts investors back to carry trading.

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