Unwinding the Yen Carry Trade: How Japan's Shifting Rate Policy Impacts Global Markets
For nearly two decades, one trade has quietly underpinned liquidity across global markets: borrow cheaply in Japanese yen, then invest the proceeds in higher-yielding assets elsewhere. It's called the yen carry trade, and it works only for as long as Japanese interest rates stay far below the rest of the world's. That gap is now closing faster than markets expected, and September 2026 could be the month it narrows the most sharply yet. What Is the Yen Carry Trade? The mechanics are...