1 408
Subscribers
No data24 hours
No data7 days
No data30 days
Posts Archive
Here I will tell you the fact ...
For over 20 years, Japan's near-zero interest rates fuelled a massive carry trade estimated at over USD 20 trillion.
Savvy investors borrowed the Yen at low interest rates, converted it to USD, and deployed it in higher-yielding assets globally. It was a win-win...until now.
The Bank of Japan's recent hike to 0.25% - their first in 15 years - has flipped the script. We've seen the Yen surge 12% against the USD, from 160 to 142 Yen per dollar.
Also, compared to one month ago, for every USD 1 trillion borrowed in Yen, an additional USD 135 billion is now required to repay the loan.
The fallout? Market turbulence on a global scale. We're seeing the ripple effects:
β‘οΈ Nikkei down 25% from its peak
β‘οΈ US and European equities sliding 5-7%
β‘οΈ Even the Nifty50 has retreated about 4% this month
But there's a silver lining for Indian investors - while we can't completely escape the turbulence, Indiaβs fundamentals remain strong. In fact, if this correction deepens, we might just see some opportunities to deploy capital.
What's your view on the current market dynamics?
