Hyun Song Shin on How Big the Yen Carry Trade Really Is | Odd Lots

Remember August 5th? That was the day that markets around the world plunged in historic fashion and everyone became an overnight expert on the yen carry trade. But what really is the yen carry trade? How big is it? Who is making the trade? And what is its connection to markets all around the world? On this episode, recorded at the Kansas City Federal Reserve Bank of Kansas City's Economic Symposium in Jackson Hole, Wyoming, we speak with Hyun Song Shin, economic advisor and head of research at the Bank for International Settlements. He walks us through the mechanics of the trade, what went on in early August, and the lessons we've already learned from it.

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[Anders]

I saw a chart showing the Yen vs Nasdaq and there was a remarkably close inverse correlation between the two curves. My amateur guess is that the hidden part of the yen carry trade is much larger than the official statistics. Some have mentioned $20 trillion in yen carry trade.