A carry trade involves borrowing in a currency with a low interest rate and investing in a currency with a higher interest rate. This strategy aims to profit from the difference in interest rates, often accompanied by exchange rate movements.
Consider a scenario where an investor borrows Japanese yen at an interest rate of 0.5% to invest in Australian dollars that yield 2.5%. If the investor expects the Australian dollar to appreciate against the Japanese yen, what is the primary motivation for executing this carry trade?