What Is a Carry Trade, and How Did a Small Rate Hike in Japan Just Trigger a Global Sell-Off?
The Motley Fool
AUGUST 5, 2024
Why did markets around the world drop sharply on Monday? What does it have to do with the Bank of Japan? And what is a carry trade? It turns out those questions are all closely related. Read on for the answers. Why a carry trade may be responsible for the market's current turmoil For months, market observers have been talking about a popular trade in which investors borrowed in Japanese yen at very low interest rates, and then invested the borrowed money in high-growth investments like the " Mag
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