" The yen rose against all 16 of the most actively traded currencies as global equities fell, prompting traders to reduce investment in assets funded by borrowing in Japan.
Japan's currency rose to an almost three-month high against the dollar, 1.7 percent against the Australian dollar and 2.8 percent against the Brazilian real. The 10-year swap spread, a gauge of what companies pay over benchmark lending rates, rose to 73.30 basis points, the highest since February 2002.
"The risk theme is very pervasive today,'' said Brian Taylor, chief currency trader in Buffalo, New York, at Manufacturers & Traders Trust, which has $50 billion in assets. ``As credit spreads widen, we're seeing the carry trade being unwound.'' "
Source: Yen Advances After Equity Declines Prompt Carry Trade Unwinding (http://www.bloomberg.com/apps/news?pid=20601087&sid=aV10d_Nt7e08&refer=home)