Yen Carry Unwind

Dated events

1. May 23, 2013 · Yen rises 2% and Nikkei falls 7.3% after Bernanke taper hint
   A day after the U.S. Federal Reserve chairman suggested the central bank might slow its money-printing program, and with weak Chinese factory data adding to worries, the yen strengthened sharply and Japan's stock market fell 7.3%. Investors who had borrowed cheaply in yen to buy stocks and bonds worldwide rushed to close those trades and convert back to yen, causing global stock prices to fall.
2. Jan. 29, 2016 · BoJ surprises markets by adopting a negative interest rate of -0.1%
   Japan's central bank surprised markets by announcing it would charge banks on some of the money they keep with it, a move meant to weaken the yen. The yen fell at first, but within two weeks it had risen sharply instead, and investors holding stocks and bonds bought with borrowed yen sold them to pay back their loans, adding to a global stock market slide.
3. Sept. 22, 2022 · BoJ holds rates near zero; Japan buys yen for the first time since 1998
   While other central banks were raising interest rates to fight inflation, Japan's central bank kept rates near zero, and the yen fell past 145 per dollar, its weakest in 24 years. Hours later Japan's government stepped in to buy yen for the first time since 1998, and the yen rose as much as 2.5%, catching out investors who had bet on a weaker yen.
4. July 31, 2024 · BoJ raises rates to 0.25%; yen carry trades unwind in the following days
   Japan's central bank raised interest rates to 0.25%, only its second increase in 17 years, making the yen more valuable. Investors who had borrowed huge amounts of cheap yen to buy stocks and other assets around the world rushed to sell those holdings and convert the money back to yen, and within days stock prices fell sharply in many countries.

Assets named in this scenario · 14

Invesco QQQ Trust (Nasdaq-100)iShares MSCI Japan ETFJapanese Yen (JPY)Mitsubishi CorpMitsubishi UFJ FinancialMizuho FinancialSoftBank GroupSony GroupSony Group (ADR)SPDR S&P 500 ETF TrustSumitomo Mitsui FinancialTokio MarineToyota MotorToyota Motor (ADR)

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