MACROECONOMICS

Japan and the Determination to End Yen Carry Trade - Will It Succeed?

Yen Carry Trade is not the only obstacle for BOJ in the regime change process - to change the policy framework on interest rates and currency.

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Last Monday: a series of stock markets from Asia, Europe to America plunged sharply. The Japanese and Korean stock exchanges had to halt trading (circuit breaker) after the indices of these two exchanges dropped sharply… All of it recalls the horrific Black Monday event of 1987. Although the market recovered mid-week, similar volatility promises to return in the coming time.

The overly strong reaction on Monday was because investors are gradually realizing that their long-held immutable beliefs over the past time, including: the strength of the US economy + the AI revolution could be the Industry 4.0 revolution that changes the world + or Japan will not raise interest rates (or not raise too much)... could all be wrong.

This is also the greatest proof of the enormous influence of Yen Carry Trade speculators on the global financial market. The market's violent reaction forced BOJ to step in and promise not to raise interest rates when the market is unstable.

  • However, in the face of the market's harsh criticism, is BOJ really wrong?

  • And will Yen Carry Trade be revived with BOJ's promise?

  • Or is this just temporary calm before a bigger storm? 

This week's macroeconomic article from Viet Hustler continues to comment on the position of Yen Carry Trade and the greater pressures placed on the shoulders of the Bank of Japan (BOJ).

Disclaimer: Some of the views below are the personal opinions of the author alone, and are by no means investment advice!

Nếu bạn yêu thích những bài kinh tế vĩ mô của Linh Hà hay phân tích thị trường của Steve. Hãy subscribe để theo dõi Viet Hustler nhé!

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