Lena Petrova: Japan Lit the Fuse, the Yen Carry Trade Unwind will Crash the US Economy

In a significant move that is sending shockwaves across the globe, the Bank of Japan has raised its benchmark interest rate for the first time in three decades. The 25 basis point increase to 0.75% may seem like a modest adjustment, but it marks a pivotal shift in the global financial landscape. As we explore in this blog post, this change signals the end of Japan’s ultra-low interest rate era and the beginning of a tightening cycle that is likely to have far-reaching consequences. For nearly 30 years, Japan’s near-zero interest rates enabled the yen carry trade, a strategy where…