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‼️ Countdown 30 days: A moment's hesitation by the Bank of Japan, will a $2 trillion 'black swan' hang over the world? 听四叶草美女分析
December's end is approaching, and the global market holds its breath. The focus is on Tokyo—on December 19, will the Bank of Japan end its zero interest rate policy? This decision could trigger a 'time bomb' in yen carry trades worth $2 trillion.
Over the past decade, the low-interest yen has become a global 'free capital pool': investors borrow yen to exchange for high-yield currencies, directing funds to U.S. stocks and bonds, securing profit margins. Now, the expectation of interest rate hikes has soared from 30% to 82%, signaling the imminent end of this 'money party'.
Carry trade players are found worldwide: hedge funds are ramping up leverage, banks act as intermediaries, Japan's GPIF, insurance companies are massively investing overseas, 'Mrs. Watanabe', retail investors, Apple, and Buffett are all deeply involved. Once interest rates rise, a double squeeze will occur—financing costs will increase, yen appreciation will erode profits, and $2 trillion may face collective liquidation.
The consequences are staggering: high-risk assets plummet, global liquidity tightens, and the risk of emerging market currency collapses resurfaces. A slight adjustment in July 2024 has seen the Nasdaq plummet by 8%. In 1998, the yen appreciated by 12%, and emerging markets collectively plunged.
Now the scale is larger, and leverage is higher. The Bank of Japan faces a dilemma: inflation is high, yet it is reluctant to act rashly. Market dynamics are intensifying, and funds are rapidly withdrawing. The black swan is heading towards Tokyo on December 19. Will it take off? The world waits with bated breath.
