WARNING: 🇯🇵 BOJ yen intervention may have just started. And this matters far beyond Japan👇 USD/JPY suddenly fell from 162.7 to 160.8 within hours. There was no major news, fueling speculations that the Bank of Japan may have intervened to support the yen. Why does that matter? Investors have borrowed cheap yen for years to buy stocks and other assets around the world. This is known as the yen carry trade. When the yen suddenly gets stronger, those loans become more expensive. That forces investors to sell assets to repay their yen debt. If a large amount of investors do that at the same time, markets will face heavy selling pressure. The Bank of Japan wants to stop the yen from weakening because it makes imports more expensive and pushes inflation higher. That’s why traders are watching Japan so closely. If the BOJ steps up its intervention, this could become dangerous for markets soon. Follow and turn on notifications to stay up to date.