Alright, let’s discuss the yen carry trade, aka how the big dogs like Buffett and Cuban have been milking the Japanese yen for years.
And what it means for the stock market aka what happened today.
This is what they do: borrow yen at near-zero interest rates, convert it to USD, and throw it into stocks or other assets with fat returns.
This worked because Japan’s central bank was practically allergic to raising rates (until recently).
It’s been like printing money for them.
The kicker?
As the yen kept falling, these guys got to enjoy even lower debt costs. Easy money, right?
But here’s the twist—Japan finally hiked rates for the first time in a decade, and the yen is starting to bite back. Buffett’s now trimming his Apple stake, and some think it’s because his yen bet might be going south.
So, who’s still playing this game big time, and how do we stick it to them if the yen suddenly pops?
Remember, this could be the mother of all squeezes if things flip.
Read more here:
https://finance.yahoo.com/news/carry-trade-fiasco-continues-did-100034344.html
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