How Japan's yen rout could spark a US financial crisis

'Slow motion currency crisis': Investing pros worry the Japanese yen is about to rock markets again

Japan's yen is trading near a 40-year low against the dollar, triggering fears that the yen carry trade may unwind.Bloomberg/Getty ImagesWall Street is worried that the yen carry trade could unwind again.The trade involves borrowing yen at low rates and converting to dollars to invest in higher-yielding assets.Prior carry trade unwinds have caused major volatility in global financial markets.The "yen carry trade" has entered the chat again.Wall …

How Japan's yen rout could spark a US financial crisis

For decades, the global financial system has been founded on a convenient assumption. The US would keep taking on more debt, and countries like Japan would cover the bill. America got to borrow money at low interest rates, while Japan got to amass massive cash reserves invested in US Treasury bonds. And in the meantime, […] The post How Japan’s yen rout could spark a US financial crisis appeared first on Asia Times.