2024-08-13 00:50:00 ET
Summary
- The catalyst for last week’s stock market gyrations was mostly the Japanese carry trade.
- When Japan’s stock market trades dramatically lower overnight, U.S. stocks tend to open lower.
- It is estimated that 75% of the Japanese carry trade has been unwound, so Treasury yields have firmed up in recent days, but U.S. yields are still substantially lower than they were just a few weeks ago.
The catalyst for last week’s stock market gyrations was mostly the Japanese carry trade. That’s a situation where investors sell the Japanese Yen to benefit from the U.S. dollar’s appreciation versus the Yen, as the U.S. dollar yields far more than the near-zero interest rates in the Yen....
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For further details see:
Look To Japan For The Cause Of The Latest Volatility
