Does anyone know if it's feasible for an individual to execute a carry trade or at least somehow leverage the cheap interest rates Japanese banks are charging on loans?

Yes, very straightforward, I have done this for many years as an individual. Your key problem I suspect will be finding an institution that will give you a JPY loan - I would guess they're hard to get at your local BoA branch. You are in Washington state ? Try the banks around the Japanese community, or if you have equity assets your broker might be able to help.

Yes- Seattle's not to far away and there is a substantial Asian community there- very good idea thanks!

There was an article last week in The Economist which described the carry trade as 'picking up nickels in front of a steamroller' since the down side is so nasty. It might be worth tracking down (I think I've tossed that copy or I'd scan & post) and reading.

-Zeke

Ya I read that. I figure as soon the Economist says something is a bad idea it will be 3-6 months before their predictions come true. How long have they been ragging on the housing bubble? And only now it's coming to fruition in the U.S...

Yes, I should have said that while overall it has been worthwhile for me, the thing you really have to watch out for is the FX rate. I got killed on one deal where the trade got called in when the GBP rate hit a 20 year low. If you're doing JPY / USD carry think carefully about your exposures for a JPY range of 90 to 130.

Regards

Mark