An FX carry trade is when you borrow (funding) a low-yielding currency to buy a high-interest currency (target) to exploit the carry or rate differential in the exchange rate. This trade works as long as there is low volatility and the spot does not move against you dramatically. Volatility spikes can cause global portfolios to trim risk and move money back into funding currencies. That is why carry trades are mostly considered a "risk on" strategy. The MXN/JPY carry trade (l