Borrowed Yen

For decades, the Bank of Japan has kept its interest rates at or below zero to fight off deflation. While intended to stimulate the domestic economy, this policy accidentally birthed one of the most powerful and dangerous strategies in global finance: the Yen Carry Trade. It sounds simple: borrow money in Japan where it costs nothing, and invest it in high-yielding assets like American tech stocks or Mexican bonds, pocketing the difference.
Borrowed Yen dissects the invisible, multi-trillion-dollar river of liquidity that fuels global market rallies. When institutional investors execute this trade on a massive scale, leveraging their bets ten-to-one, they create an artificial boom in asset prices completely disconnected from actual economic value.
But this mechanism holds a terrifying trapdoor. The book explains the catastrophic ripple effects of the "unwind." If the Yen suddenly strengthens or Japanese interest rates tick upward, billions of dollars of leveraged bets sour overnight, forcing massive, panicked sell-offs in global stock markets as investors scramble to cover their margin calls.
Look beneath the surface of the next stock market crash. Understanding the mechanics of the carry trade is essential for any serious investor trying to comprehend why a policy shift in Tokyo can instantly wipe out tech portfolios in New York.