Yen Arbitrage Trading ( carry trade ) Why is it so important? How can it leverage the entire risk market for a structural adjustment?

This matter is quite interesting to talk about. When the Japanese yen interest rate stays low for a long time, investors borrow cheap yen to buy high-yield assets, and as they add leverage, the scale increases. However, once the yen suddenly appreciates or the central bank's policy shifts, this arbitrage position needs to be closed, and the chain reaction directly transmits to the stock market, bond market, and crypto market.

So don't underestimate exchange rate fluctuations; the capital flows involved can instantly change market sentiment.

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CryptoNomics

· 7h ago

ngl the yen carry unwind is basically a textbook case of how leverage + currency mismatches create systemic fragility. most traders obsess over btc technicals while ignoring that massive cross-asset correlation matrix screaming red. wild how a jpy rate move can cascade through everything.

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digital_archaeologist

· 14h ago

When the Japanese yen carry trade collapses, the whole world shakes along with it; this logic is truly amazing.

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EternalMiner

· 12-01 06:58

When this arbitrage position blows up, the entire market has to shake along, leverage is really that bizarre.

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SignatureDenied

· 12-01 06:55

When the yen carry trade closes, the whole market has to shake three times along with it, this is the real "butterfly effect"!

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OnchainDetective

· 12-01 06:55

The Japanese yen carry trade has indeed played a big role this time; a single exchange rate fluctuation has caused the entire market to collapse. That's how leverage works.

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HodlVeteran

· 12-01 06:42

Oh, this is the trap that I got Rekt in 2015, I got completely wrecked when I added leverage.

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CodeSmellHunter

· 12-01 06:33

The Japanese yen carry trade has collapsed, and we in the crypto world are going down with it. This trap needs to be etched in our minds.

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VCsSuckMyLiquidity

· 12-01 06:32

When the yen carry trade goes bad, the entire market is trapped, and that’s why we are always trapped.