Shuli Ren, Columnist

How Big Is the Yen Carry Trade, Really?

Estimates go into trillions of dollars. Global investors have been eager and so has the Japanese government.

August 6, 2024 at 3:00 PM EDT

Updated on

August 13, 2024 at 9:24 AM EDT

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. A former investment banker, she was a markets reporter for Barron’s. She is a CFA charterholder.

What happens in Tokyo matters in New York.
Photographer: Kiyoshi Ota/Bloomberg

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When two popular trades, such as buying US big tech stocks and selling the Japanese yen, are unraveling at the same time, investors naturally think they are somehow related.

There is now worry that the unwinding of yen-funded carry trades would wreck investors’ frothy exposures to US technology and AI-related companies. After all, the 11% surge in the Japanese currency since early July has been in lockstep with the Nasdaq 100 Index’s 13% maximum drawdown.