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    A tldr of what‘s been happening on the market.

    The sharp rise in the JPY/USD is causing a massive unwind of Yen carry trade positions and contributing to the sharp decline in US stocks. For those who do not understand how this works, a brief explanation

    1. Many traders were borrowing Jap Yen (JPY) at low interest rates, converted them to USD and used this to buy US stocks

    2. Now that the Bank of Japan (BOJ) is raising interest rates, the JPY has strengthened significantly against the USD.

    Now, these traders are in big shit. Not only must they pay higher interest for the JPY they borrowed, they are now facing huge forex losses as well. The USD assets they are holding may not be enough to repay the JPY they have borrowed.

    1. This is causing a huge unwind of these trade positions. Traders facing big losses and margin calls are selling their US stocks to raise USD, converting back to JPY and paying back their loans.

    2. This can lead to more selling pressure on US stocks and even more declines in the short term. Middle east war escalation, US political uncertainty is also adding to the fear and panic.

    A tldr of what‘s been happening on the market.
    byu/theknowndudereturns inwallstreetbets



    Posted by theknowndudereturns

    View 44 Comments

    44 Comments

    1. Marko-2091 on

      Ohhhh… so this is on top of the “recession news” last week. Dammit all crisis start with multiple bullshit exploding at the same time.

    2. potahtopotarto on

      There have been so many indicators of a crash in the last few weeks, we’ve been in a massive bubble, this is absolutely not solely on Japan

    4. Winter-Relationship3 on

      yall think its better to Market sell at open for -10% or wait a bit for the price to hit -5% to sell?

    5. boofuu2 on

      It’s a blip, don’t be fooled. It’ll last a week or two. Buy the dip, the whales sure will. Thats why buffet has stock pilled all this cash, he’s gonna time the market and you pu$$ies are gonna lose out again by being afraid

    7. Tall_Bumblebee_4745 on

      Man, I graduated high school in 2008 with the recession in full swing and it traumatized the hell out of me. The area I lived in got absolutely decimated and you couldn’t even get a job at places like Walmart. It took me like 6 months just to get a job as a dishwasher at a fucking Ruby Tuesday back then. I’m terrified of going through that again with a kid of my own.

    8. NatureBoyJ1 on

      As a tiny little retail investor with a 401k and IRA, this makes me feel like a leaf being carried along by a raging river. There are forces far beyond what I can see or understand affecting the markets. All I can do is hang on and hope the big players move the markets upward over the long term and I get to go along for the ride.

    9. AmNotPeeing on

      So what you’re saying is… buy the dip, sell everything, the end is nigh,it’s only a loss if you sell, buy high, sell low and show us your screenshots?

    11. Tundraspin on

      So did anyone short the Yen heavily, better than puts on QQQ and SPY today?

      Reminds me of Liz truss business plan that was donks, and her former financial company had heavily shorted the pound next day and made fuck tons.

    20. straightbear123 on

      There’s been plenty of movement of this magnitude in the JPN/USD over the years yet it was never responsible for something like this. The true explanation is the most overpriced bubble in history is finally popping

    22. GoTakeCoffee on

      Could have at least credited the tweet you stole this from ![img](emote|t5_2th52|4640)

    24. squintamongdablind on

      I’ve been in the red for over a year now. This is just another day in the office lol. Speaking of office, y’all know if Wendy’s is still hiring?

    27. BussySlayer69 on

      I don’t get why BOJ raised rates all of a sudden. Didn’t they want inflation? Their economy has been deflating for decades.

    29. MudaThumpa on

      Big institutional investors buttfudging the everyman to pay for cocktails on their G5s.

    31. thecashblaster on

      So Japanese monetary policy was causing stocks to inflate in the US? This is some real degenerate shit

    34. izzytheasian on

      Really well explained. Also unemployment uptick last week and news of Warren selling half his Apple stake adds a bit more fear too. Though the impact of the carry trade is probably more direct

    38. AndrewHolyMan on

      I’ll wait until the sp500 falls below the 200 day moving average to panic. If it does, then we probably head lower

    39. Immediate-Goose-4890 on

      Conveniently, no one has heard anything about this until it becomes a complete shit show

    40. longstorySchorsch on

      The Japanese Government gross size of its balance sheet is $20 trillion or 505% of Japanese GDP!

      In other words, Japan’s government is engaged in a GIANT $20 trillion „carry trade“ – the funding of loans and foreign assets by borrowing low-cost yen.

      https://preview.redd.it/akc5xu206ugd1.jpeg?width=1260&format=pjpg&auto=webp&s=2b0bba8e1b2c015795720a23838471dcb90704a8

      [source](https://x.com/globalmktobserv/status/1820357077077721452?s=46&t=UIfYH74Mf3Tnee02OQ5cTg)

    43. Luddites_Unite on

      Is there any concrete numbers on how much money has been borrowed that potentially has to unwind now?

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