The carry strategy involves borrowing at low rates to fund purchases in higher-yielding assets elsewhere.
The trade has been pummeled this past week as yen volatility jumped.
The decision is the latest sign of India's growing appeal to international investors.
The investment bank is advising its clients to buy Treasury five-year notes and 30-year inflation-linked debt.
Despite their Fitch downgrade, few assets rival Treasurys' status as the haven of choice.
Benchmark share indexes are expected to rise in most emerging markets by year-end.
The debt-ceiling debate has become an unwelcome sideshow for investors.
While the bond sell-off seems to be on hold, Japanese investors aren't moving back to U.S. Treasurys.
The U.S., at 19th, could increase its ranking if it raised the minimum pension for low-income retirees.
Bond yields in Australia and New Zealand have dropped to record lows.