Lena Petrova: $7 Trillion Bond Market Meltdown as the Beginning of Yen Carry Trade Unwind

The tranquil landscape of Japan’s financial markets is showing signs of turbulence, sending ripples across the globe. A recent surge in Japanese government bond yields, coupled with a weakening yen, has sparked fears of a systemic shift in the country’s traditionally stable financial environment. As Japan’s economic paradigm undergoes a dramatic change, the world is watching with bated breath, aware that the reverberations could be felt far beyond its shores. For decades, Japan has played a crucial role as a global financial shock absorber, providing cheap capital through its low-yielding government bonds. Japanese investors would then use these funds to…