Yen Short Bets Hit Nine-Year High as Carry Trade Revives Before BOJ Decision
Speculative traders have pushed short positions against the Japanese yen to their highest level in nine years, signaling a broad revival of the yen carry trade — a strategy that involves borrowing cheap yen to buy higher-yielding assets elsewhere. The Bank of Japan is set to announce its rate decision on Tuesday, with markets currently pricing in a 25 basis point hike at the June meeting. The gap between what traders are betting and what the BOJ may actually do is as wide as it has been in nearly a decade.
A crowded yen carry trade is a systemic risk hiding in plain sight — when it unwinds, it tends to unwind fast, hitting risk assets globally including equities, crypto, and high-yield bonds simultaneously. If the BOJ surprises with a hike sooner than expected, the rush to close yen shorts could spike the yen sharply and trigger forced selling across asset classes. Investors with exposure to Japanese equities or global risk assets should be aware that the carry trade at nine-year extremes is a compressed spring.
Tuesday (this week): Bank of Japan rate decision. June meeting: BOJ rate decision where a 25 basis point hike is currently priced in.
- Yen Short Bets Jump to Nine-Year High as Carry Trade Revives · Bloomberg
- BOJ preview June: 25 bps rate hike expected, hawkish outlook in focus · Investing.com
- Bitcoin traders watch Bank of Japan rate decision as yen shorts hit nine-year high · CoinDesk
- Japan's Nikkei hits 70,000 as BOJ rate hike sparks rally · Nikkei Asia
- Bank of Japan raises rates to 1% for first time since 1995 · Financial Times
- Bank of Japan Hike Shows Inflation Worries, Strategists Say · Bloomberg
- Yen Pares Gains Versus Dollar After BOJ Hikes Key Rate to 1% · Bloomberg
- Nikkei and Topix pause after Iran rally – awaiting Bank of Japan rate decision · Handelsblatt
- Nikkei and Topix: Asian exchanges open slightly lower after Iran rally — focus on Japan's interest rate decision · Handelsblatt
- Japan raises interest rate to highest since 1995 · BBC Business
- Bank of Japan raises rates to highest level since 1995 · Nikkei Asia
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