Wall Street Warns of Yen Carry Trade Unwinding Risk to U.S. Markets on July 9

According to Business Insider on July 9, Wall Street analysts warned that disorderly unwinding of yen carry trades could trigger widespread damage to U.S. markets. The dollar-yen exchange rate hit a 39.5-year high recently, trading around 162 yen per dollar, raising concerns about potential intervention by the Japanese government or rate hikes by the Bank of Japan. Either scenario could force investors to liquidate dollar-denominated assets financed in yen, disrupting global liquidity. Additionally, rising Japanese government debt concerns have already pushed 10-year bond yields up 150 basis points over the past year, further increasing unwinding risks and potentially pressuring U.S. equity valuations.
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