Was not in everyday vocabulary for years, but... We heard about "negative interest rates" in Japan for many years, but now a new phrase has taken the stage--"Yen Carry Trade.
Is the recent recent stock sell-off in the US due to growth concerns -- after a weak labor report, etc?
Or is the the real cause of the sell-off the unwinding Yen carry trade.
Hedge funds have been making money on the Yen carry trade. Borrowing cheaply in Yen and investing in stocks and Treasuries in the US.
But now Japan is raising interest rates and will continue to do so.
Some sense of panic will be in the markets.
Combining slower economic growth stats plus other things, and now the Yen Carry trade issue, rougher times ahead?