Monday saw global stock markets experiencing chaos, with Japan's Nikkei 225 index dropping by 13% at its lowest.
Markets across the globe experienced chaos on Monday with some suggesting that this was caused by the strategy of carry trades.On Monday, stock markets across Asia plunged following the release of weaker-than-expected U.S. jobs data on Friday, which had a knock-on effect on the global economic outlook.Japan's Nikkei 225 index dropped by 13% at its lowest, which was its biggest single-day rout since 'Black Monday' in October 1987.
stocks and Treasury bonds, with the expectation of earning a higher return.The main driver of a carry trade is the disparity in interest rates between countries. The Bank of Japan, aiming to stimulate economic growth through increased spending, has maintained near-zero interest rates for years.Last week, however, it raised its primary interest rate from nearly zero. This hike typically strengthens a country's currency, leading to a surge in the Japanese yen against the U.S. dollar.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Japanese Yen rises due to carry trades unwinding as BoJ policy meeting loomsThe Japanese Yen (JPY) extends its upward trend against the US Dollar (USD) for the fourth straight session, hovering near its 12-week high of 152.64 set on Thursday.
Read more »
Yen jumps as carry trades unwind, risk mood soursYen jumps as carry trades unwind, risk mood sours
Read more »
Yen heads for strongest week in 3 months as carry trades unwindYen heads for strongest week in 3 months as carry trades unwind
Read more »
More unwinding of JPY carry trades at the BOJ meetingUSD/JPY plunged from 162 to 152 in the fortnight to July 25.
Read more »
Surging yen upends popular global FX carry tradesSurging yen upends popular global FX carry trades
Read more »
Bitcoin Drops 15% Against Japanese Yen, Outpacing Declines Versus USD, as Yen Carry Trades UnwindShaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.
Read more »