16min chapter

Goldman Sachs Exchanges cover image

How a popular trade collapsed — and why it matters

Goldman Sachs Exchanges

CHAPTER

The Yen Carry Trade Unraveled

This chapter examines the evolution and complexities of yen carry trades, tracing their history back to the Lehman crisis and analyzing their resurgence since Japan's negative interest rates in 2016. It delves into the strategies of institutional investors and hedge funds, highlighting the challenges in managing positions amid market volatility and the significant impacts of changes in economic conditions. The discussion reveals the interconnectedness of financial markets and the factors contributing to recent fluctuations, including a crowded trade unwinding and the effects on risk management practices.

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