Why Japan's Yen 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.

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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
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[shikaryun]

Both the old man and the inn lady were impressive. She runs a traditional inn but still seems to have a solid grasp of modern finance. 💯

[aadifernandes]

"I don't trust people but animals are honest"

Words to live by sir!

[kakomamakondo]

We need a documentary on Shigeru Fujimoto😂😂

[CaptureAsia]

06:03 This man computer set-up is better than most people.

[TrevorOuellette]

The budgie lost $4.57 in the yen carry trade unwind but that was only 15% of his overall portfolio. He’s well diversified.

[Shaker]

That innkeep lady has a beautiful voice. So soothing.

[grimaffiliations]

Remember when everyone was saying Japans currency would collapse because of their massive debt? I remember

[ingislakur]

Carry traders in Iceland lost everything in 2008 crash. They borrowed from Japan and invested in ICeland. and then Iceland crashed famously and these investors lost moral of the story. This investement is far from safe.

[CaptureAsia]

05:28 "I don't trust people" words of wisdom.

[yt-mca]

Too short documentary for such a complex situation

[Sjalabais]

"The Great Unwind", as we call it today...lady, this just happened. :P

[bombasticcat]

9:58 he is the master from Vagabond. "Preoccupied with a single leaf, you won't see the tree. Preoccupied with a single tree, you'll miss the entire forest."

[Kbarboza]

Using credit cards for investments is wild to me.

[AMNG]

"But animals are honest"

Me: Squints and looks at my cat

[RoboticDragon]

So clearly I missed it, Why is the Yen so volatile?

[itsnelson]

It was just a matter of time that they would raise the interest rate again. Anyone who thought otherwise clearly doesn't understand Japan's economic situation. And of course it would shake the markets, Japan is the fourth largest economy.

[ClaytonGrimwald]

But, due to unruliness or poor behavior there has been, as of late, major pushback against tourism here in Japan. It's a move that simply can't be made while major fumbles like this are occuring.

[andrewfales]

The 88 year old pensioner is inspiring!

[putinlovehamas]

the most interesting facts is that the Japanese trader started trade at age 66, you are never too old to start trade.

[lashlarue]

Mrs. Yamamoto strikes again... "the widowmaker trade" never dies...