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🇯🇵 Twitter (X) is once again spreading fears about the “carry trade” -…
🇯🇵 Twitter (X) is once again spreading fears about the “carry trade” - a scenario that triggered a crash in both crypto and stock markets in 2024 The theory: Japan’s central bank raised interest rates to 1% — the highest level in 31 years - while USD/JPY is once again trading near the 160 level. This is considered a critical zone by the market, as Japan has previously intervened at these levels to strengthen the yen. If Japan starts intervening again, the yen could strengthen sharply. Investors would then begin unwinding “carry trades,” where they borrow cheap yen and invest in risk assets such as stocks, crypto, and gold. In 2024, a similar carry trade unwind triggered panic: the Japanese stock market crashed, the VIX surged to COVID-era levels, and BTC and altcoins took a major hit alongside broader risk assets. On Twitter (X), two additional factors are being highlighted: the U.S.–Iran deal and the hype around SpaceX (SPCX). The market is viewed as overheated, with profit-taking pressure building.
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