$LUMIA
Trillions of dollars sweep foreign exchange! Japanese housewives rise from the ruins of the bubble! After the collapse of the real estate bubble, Japanese household wealth evaporated by more than half, and bank deposit interest rates approached zero. Who would have thought that the saviors of household assets would be the housewives holding fiscal power? This group of ordinary women, known as 'Mrs. Watanabe', swept the foreign exchange market with trillions of dollars, shaking global exchange rates at one point, but lost all their savings in two crises, ultimately becoming a benchmark for rational investment.
In the 1990s, more than half of Japanese households' assets were in cash deposits, and low interest rates prompted housewives to seek alternative paths. They discovered a loophole in the yen carry trade: borrowing yen at almost zero cost, converting it into high-interest foreign currencies, leveraging dozens of times for arbitrage, with annualized returns exceeding 30% at one point. In foreign exchange brokerage firms in Tokyo's Ginza, housewives gathered to monitor trading, their trading volume accounting for one-third of Japan's foreign exchange market, even Wall Street hedge funds followed suit.
However, high returns concealed deadly risks. The 1998 Russian debt crisis triggered a surge in the yen, and 50 times leverage caused countless families to lose all their savings; the 2008 subprime mortgage crisis hit again, and Mrs. Watanabe's cumulative losses approached 700 million dollars. The painful lessons made them realize: investments detached from the economic cycle will eventually return to zero. Afterwards, they transformed into diversified investors, venturing into stocks, gold, and even cryptocurrencies, evolving from speculative followers to market observers.
In 2024, Japan ended its negative interest rates, with Japanese stocks, gold, and digital currencies all rising, thanks in no small part to the precise layouts of Mrs. Watanabe. From high-leverage arbitrage to reverence for cycles, they have proven over more than twenty years that there are no shortcuts in investment. Nowadays, with cryptocurrency and foreign exchange markets experiencing severe volatility, do you think Mrs. Watanabe's strategy of 'diversification + reverence for cycles' can be replicated in today's investments?