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Psychic Serena
Psychic Serena
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Region: NG
Friday 10 July 2026 14:54:26 GMT
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Here's how the carry trade works. Investors borrow cheaply from the Bank of Japan and put that money into higher-yielding assets like US stocks and treasuries. When Japan raises rates, that borrowing gets expensive, so investors sell those assets to pay it back. Treasuries flood back to the market, the yen strengthens and risk assets sell off across the board. It already happened in part in August 2024, when the Nikkei dropped about 12% in a single day. If that pressure builds again, the effect moves through every major asset.
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