How Carry Trades Contributed to Global Market Chaos
==========
Stock markets across Asia plunged on Monday following weaker-than-expected U.S. jobs data on Friday; Japan's Nikkei 225 index dropped by 13%, its biggest single-day rout since October 1987; The sell-off was exacerbated by a mass sell-off of U.S. dollars tied to carry trade deals; Carry trades involve borrowing at low interest rates in one currency to invest in higher-yield assets in another currency; Investors have borrowed Japanese yen and invested in U.S. stocks and Treasury bonds; The Bank of Japan raised its primary interest rate, leading to a surge in the Japanese yen against the U.S. dollar; Some traders offloaded higher-risk assets in response to the sudden increase in borrowing costs and declining share values; Financial markets showed signs of stabilizing on Tuesday, with Japan's Nikkei 225 index rising 10.2% and other markets mostly higher
#CarryTrades #StockMarkets #Asia #Japan #Nikkei225 #UsJobsData #InterestRates #BankOfJapan
https://www.newsweek.com/global-stock-markets-carry-trades-economic-outlook-1935217
Newsweek /
npub1ka…2agq5
2024-08-06 16:14:43
Author Public Key
npub1ka5jtasfg8rfe47ypj4x0a2d70fvaksu0u9z9rku70yc8hmjmu9sz2agq5Published at
2024-08-06 16:14:43Event JSON
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"content": "How Carry Trades Contributed to Global Market Chaos\n==========\n\nStock markets across Asia plunged on Monday following weaker-than-expected U.S. jobs data on Friday; Japan's Nikkei 225 index dropped by 13%, its biggest single-day rout since October 1987; The sell-off was exacerbated by a mass sell-off of U.S. dollars tied to carry trade deals; Carry trades involve borrowing at low interest rates in one currency to invest in higher-yield assets in another currency; Investors have borrowed Japanese yen and invested in U.S. stocks and Treasury bonds; The Bank of Japan raised its primary interest rate, leading to a surge in the Japanese yen against the U.S. dollar; Some traders offloaded higher-risk assets in response to the sudden increase in borrowing costs and declining share values; Financial markets showed signs of stabilizing on Tuesday, with Japan's Nikkei 225 index rising 10.2% and other markets mostly higher\n\n#CarryTrades #StockMarkets #Asia #Japan #Nikkei225 #UsJobsData #InterestRates #BankOfJapan\n\nhttps://www.newsweek.com/global-stock-markets-carry-trades-economic-outlook-1935217",
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