The $20 Trillion Carry Trade Has Finally Blown Up – It’s Game Over For Japan

Late last year, when the latest cycle of the yen carry trade was still in its relative infancy (the USDJPY was in the low 140s then, on its way to a mindblowing and inflation-unleashing 162, not to mention two BOJ intervention), we explained why Japan’s economy is now effectively dead, and the only thing missing was declaring the time of death. The reason: the $20 trillion carry trade that the government of Japan has been engaging in for the past 40 years has been one giant a ticking timebomb, one which can not be defused, and when it blows up, it’s game over for the Bank of Japan.