Watch the Yen closely. If this continues it could cause a negative feedback loop. The yen carry trad…
Watch the Yen closely. If this continues it could cause a negative feedback loop. The yen carry trade has been blowing markets for DECADES. Yes including the GFC. Its unwind started to unravel all the hidden trash . Blew up Bear Streans Quant Funds , Bear, Countrywide, Lehman and a few others. It's popped every bubble in last 40 years. Be very careful. Treasury sold Euros bought yen. BOJ sold dollars bought yen. It rarely holds unless coordinated and sustained. Imo BOJ missed an opportunity to raise rates Thursday night same day intervention started. They could have held it. Unless intervention continues it may not hold. What a mess. Central bankers don't do their jobs. The bond markets will do it for them, at least in the US. Japan has somewhat of a bigger buffer as BOJ is biggest holder of JGBs. But they can lose control of their currency.... I watch forex and bond markets closer than anything else. Both drawf equity markets. They tell the story. Notice my yen dollar earring on my pfp?😉 I've watched these markets for over 30 years. It's amazing what they will do to try to keep it all together. But imo it will increasingly get more difficult as it has every other time. This is where patience is very important. Know what you don't know. The longer it takes to see the worse it is. You often get hours, days and even weeks of warning. https://www.bloomberg.com/news/articles/2026-07-31/yen-s-intervention-rally-stalls-as-traders-alert-for-more-action
