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The Bank of Japan has finally decided to raise interest rates to 0.75%, and the world's last "zero interest rate fortress" has collapsed.
How much impact does this have on carry trade? A report from China Merchants Bank suggests that 9 trillion yen might need to be liquidated. At first glance, that sounds alarming. But upon closer inspection, this number likely includes Japan's entire social debt, pensions, and petty cash in convenience stores. The truly urgent liquidations are not as exaggerated as they seem.
The yen is no longer "free water." Borrowing yen for carry t
View OriginalThe Bank of Japan has finally decided to raise interest rates to 0.75%, and the world's last "zero interest rate fortress" has collapsed.
How much impact does this have on carry trade? A report from China Merchants Bank suggests that 9 trillion yen might need to be liquidated. At first glance, that sounds alarming. But upon closer inspection, this number likely includes Japan's entire social debt, pensions, and petty cash in convenience stores. The truly urgent liquidations are not as exaggerated as they seem.
The yen is no longer "free water." Borrowing yen for carry t