Immediate Trade

VIX Explosion

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Greg P
Greg P
Posted underAAPLBank of JapanBrent JohnsonCarry TradeJapanLeverageMagnificent 7Milkshake TheoryNVIDIAQQQ

Yen Carry Trade Deep Dive,” Brent Johnson discusses the concept of a carry trade and how Japan’s zero or negative interest rates for decades have made the Japanese Yen an attractive currency for this investment strategy. However, when the currency starts to appreciate or interest rates rise, the cost of carry can exceed the return, leading to significant losses for investors. The unwinding of the Yen carry trade has caused losses for traders with large positions and has contributed to market volatility, particularly in semiconductor stocks and the Nikkei index. Johnson also discusses the impact of negative interest rates in Japan on investors holding Japanese government bonds and the potential for losses if interest rates rise.

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