Is the game of borrowing yen coming to an end?
Soon, the Bank of Japan will announce its interest rate decision, and global funds are holding their breath! A few days ago, the Nikkei index took a plunge, and the market has already voted with its feet.
Japan's long-standing near-zero interest rates have made the yen the cheapest borrowing tool. Many institutions borrow low-interest yen, exchange it for dollars, and invest in U.S. stocks, tech stocks, or even BTC to earn the interest differential.
The premise is that the yen must remain weak, but now with the prospect of interest rate hikes, the yen is strengthening, and borrowing costs are soaring, forcing institutions to sell off and convert back to yen to repay debts.
This reliance on a single currency for arbitrage cannot last forever! The flash crash from last August is still fresh in our minds, and now the Bank of Japan is raising interest rates again. How can small investors like us stand firm?
Want to seize opportunities after the rate hike? You can scan the code to join Sister Rong's chat room for point-to-point guidance and one-on-one layouts~
