Since 2022， the world has borrowed 161 trillion yen from Japan to buy Nvidia shares， Bitcoin， etc． “Yen carry is still the epicenter of the entire market．”
Carry trade dissolved, leaving market uncertainties difficult to overcome – calm returns Yen-funded carry trade was a surefire way to make easy profits. They simply borrowed money from Japan, the world’s last source of low-interest funds, and poured it into Mexican bonds with yields of over 10%, soaring Nvidia shares, and the cryptocurrency Bitcoin. If the yen continued to weaken, the cost of repaying the loan would fall further, making the payoff that much greater. According to GlobalData TS Lombard, about $1.1 trillion (about 161 trillion yen) was invested in the carry trade. This means that all borrowing by foreign investors in Japan from the end of 2022 onwards will be used to finance CurieTrade, and domestic investors will use leverage to purchase foreign assets. For details, see source 2024/8/12 13:05.
The yen carry trade exists because America has abnormally high interest rates, not because Japan’s monetary easing is causing the yen carry trade. The reason the yen is weak right now is because America is raising interest rates to stave off inflation in the country, and the dollar is being bought in response to these higher interest rates. If inflation in the United States subsides, the United States will also begin to lower interest rates, and the weak yen will be resolved. If deflationary Japan were to raise interest rates, it would suffer the double whammy of a recession caused by slowing consumption and rising prices. >>1.
Now that it has become a completely speculative market, we have no choice but to work to make it healthier. The same goes for real estate, which is ultimately just used for speculation, so resale clauses need to be tightened.
One day we’ll laugh and say that there was a time like that, so don’t dwell on it today and let the winds of tomorrow blow you away. The times go round and round. Joy and sorrow will repeat, and today even fallen travelers will start walking again.
Malaysia’s philosopher prime minister, Mahathir Mohamad, stood firm in the face of the Asian crisis instigated by Western financial capitalists in 1997 and defended his country to the end. In 2015, he gave a lecture entitled “The New World Order: A Recipe for War or Peace,” in which he lamented the future of “them” world domination. In Japan, the lecture can only be viewed on Nico Nico Douga.
Well, I have a question. When you borrow money in Japan, you borrow in Japanese yen, right? And yet the yen is depreciating, so does that mean that the amount of borrowing is so small?
The low interest rate policy that the Bank of Japan has implemented has not been wrong. In terms of the domestic economy, it is the Ministry of Finance’s fault for not implementing fiscal stimulus. However, the Bank of Japan suddenly reversed course, causing confusion in the market.
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