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Reply to "How will the stock market crash impact the elections?"
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[quote=Anonymous]This is the result of the unwinding of the yen carry trade (where traders borrow cheap yen at 0% interest rate and invest in US equities and bonds at a risk free rate of 5.25%+). The BoJ raised rates last week and the Fed is definitely starting the rate cuts in September. The JPY and USD are starting to get back to parity; Japanese goods and tourism won't be as cheap anymore for US buyers. Those traders engaged in the yen carry trade are closing out their positions before they get destroyed. So they sell their US assets (read: stocks) in order to pay back their borrowed money from Japanese banks before the yen gets even more expensive.[/quote]
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