The David Lin Report Japan Is ‘Insolvent’: Yen Unwind Threatens Global Markets | Michael Gayed
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Dec 3, 2025 Michael Gayed, a seasoned portfolio manager and macro expert, warns about the implications of Japan's rising interest rates on global markets. He explains the yen carry trade and its potential to trigger a sell-off. Gayed also links Japanese financial moves to U.S. equities like NVIDIA, suggesting a ripple effect on liquidity. He predicts a bright future for healthcare investments by 2025, driven by AI and deregulation. Plus, he discusses precious metals as safe havens amid market volatility, making for an engaging listen.
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Japan As The Global Liquidity Engine
- Japan has been the world's bank, supplying leverage that fueled global risk assets like NVIDIA.
- A reverse in the yen carry trade can force deleveraging pulses that ripple through stocks and bonds.
Yen Weakness Raises Real Import Costs
- Yen weakness raises Japan's import costs (especially oil), pressuring fiscal and corporate balance sheets.
- That pressure can force Japan to sell foreign assets, including U.S. Treasuries, amplifying global yield moves.
Prepare For Multi-Pulse Deleveraging
- Manage portfolios for tail risk from Japan by keeping flexible hedges and long-dated protective options.
- Avoid relying solely on timing; prepare for multiple deleveraging pulses over years, not just one event.