The Japan Carry Trade at Risk and what that means for MAG7 borrowing To prop up the Yen, Japan (the world's largest holder of U.S. Treasuries) might need to sell its U.S. Treasuries If Japan dumps U.S. Treasuries into the market, it would drive bond yields up significantly, making U.S. refinancing much more expensive This could put a damper on companies like $GOOGL and $AMZN Amazon who are looking to borrow hundreds of billions to build out AI infrastructure. If the Bank of Japan is forced to aggressively raise rates to defend the Yen, it would break the carry trade via @YouTube

The Yen carry trade is dying. Before April 2025, the USD/JPY currency pair showed a close correlation with the 10Y rate differential between US and Japanese bonds. This was driven by investors borrowing in Yen to fund higher-yielding US Dollar assets through the carry trade. That relationship broke down after "Liberation Day," when trade war uncertainty triggered a surge in market volatility and forced investors to unwind some of their carry trade positions. Meanwhile, the 10Y Treasury note yield is now trading ~2.0 percentage points above the Japanese 10Y Government Bond Yield, falling -1.0 percentage point since April 2025, near the lowest gap since 2021. Yet, USD/JPY continued to move higher as the US Dollar strengthened against the Yen, despite the narrowing yield gap, breaking away from the interest rate differential that historically drove the pair. In other words, the carry trade is losing its influence, with the Yen no longer driven primarily by rate differentials as investors increasingly price in Japan’s heavy debt burden and rising debt servicing costs. Japan’s rising debt costs are becoming impossible to ignore.

Hayes on the reverse yen carry trade: It's a controlled unwind, not a global crash. Japan will bring capital home. The U.S. backstops the selling with FIMA repo and extra dollar liquidity so Treasuries do not get dumped into a fire sale. Markets still move hard, yen up, crowded carry and U.S. tech relatively weaker, gold and crypto stronger, but the official aim is a managed rotation of what gets funded, not a 2008-style break. 📺

How do you think that the yen carry trade and Japan moving money they have in US investments back to Japan will impact BitBonds? I think it is bullish and a very opportune time for Metaplanet to be in the position that they are in. This is why I'm long Metaplanet! @gerovich @DylanLeClair

The US just put the global carry trade on life support. @Legendaryy on the show today: “This move by the Treasury is global volatility control. They want to lower global volatility, and that then should be helpful for the market to be able to go up again. The easier translation here would be to say: We want Japanese rates to be suppressed so capital can keep flowing into the US through the carry trade. If that system comes under stress, we will intervene again to keep it alive. But if the market is relying on the US now to intervene when Japanese rates are getting too high, that makes the market more fragile. The size of the carry trade would grow. That would make the intervention bigger, the potential fallout bigger, and that in itself could induce additional volatility.”

🟠 WATCH: The African Bitcoin Carry Trade Wall Street Can't Touch w/ Stafford Massie | BMP Ep 13 🎙️ Wall Street has high capital and low yields. Africa has the opposite and Bitcoin is the borderless collateral that bridges them. On the Bitcoin Magazine Podcast, @AfricaBitCorp's Director of Bitcoin Strategy @staffordmasie joins @BranBTC to explain why pairing cheap global capital with African yields is the trade Wall Street can't touch. Chapters: 00:36 — Africa Bitcoin Corporation 02:17 — Why Bitcoin Hits Different Across Africa 07:53 — How Bitcoin Saves Lives 13:00 — Turning Bitcoin Into a Lightsaber 19:12 — One Bitcoin Equals 5 to 8 African Jobs 26:00 — Africa's First Public Bitcoin Treasury 33:22 — The 2050 Vision 42:09 — Fishing Boats & Township Businesses 55:50 — AI, Mining & a Final Word on Bitcoin