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Yen rallies to 18 month high as carry trades unwind

The Japanese yen shot to an 18-month high against the US dollar this morning, signalling the unwinding of the carry trade and continued concern over bank writedowns on sub-prime mortgage exposure.

The yen was trading at ¥109.39 against the US dollar in London at GMT 11:55 this morning and has strengthened by 6.8% against the dollar in the past four weeks.

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