Why Japan's Currency Is So Volatile

There were plenty of reasons for the global market selloff on Aug. 5, including premature worries of a US slowdown and fears of an artificial intelligence bubble. But one key factor was the unwinding of a popular yen-centered carry trade. The trouble began when the yen's value started rising after the Bank of Japan hiked interest rates for a second time this year. Now, as the dust settles, investors and Japanese business owners alike are questioning the yen’s role in the global economy. For more Bloomberg reporting on the yen carry trade: https://www.bloomberg.com/news/articles/2024-08-21/yen-carry-trade-data-suggest-cautious-return-of-retail-investors?utm_medium=social&utm_source=youtube&utm_campaign=originals&utm_content=article Sign up for the Bloomberg Evening Briefing, Bloomberg’s flagship briefing in your mailbox daily: https://www.bloomberg.com/account/newsletters/evening-briefing?utm_medium=social&utm_source=youtube&utm_campaign=originals&utm_content=article 00:00 Introduction 00:48 Yen and interest rates 02:11 BOJ's July rate hike 03:10 Carry trade and the ‘Great Unwind’, explained 04:46 Impact on everyday Japanese 07:41 What this means for the yen and global markets 09:15 Uncertainty prevails #japan -------- Like this video? Subscribe: http://www.youtube.com/Bloomberg?sub_confirmation=1 Get unlimited access to Bloomberg.com for $1.99/month for the first 3 months: https://www.bloomberg.com/subscriptions?in_source=YoutubeOriginals Bloomberg Originals offers bold takes for curious minds on today’s biggest topics. Hosted by experts covering stories you haven’t seen and viewpoints you haven’t heard, you’ll discover cinematic, data-led shows that investigate the intersection of business and culture. Exploring every angle of climate change, technology, finance, sports and beyond, Bloomberg Originals is business as you’ve never seen it. Subscribe for business news, but not as you've known it: exclusive interviews, fascinating profiles, data-driven analysis, and the latest in tech innovation from around the world. Visit our partner channel Bloomberg Quicktake for global news and insight in an instant.