Archive · 20 Nov 2025
Japan's Rate Surge Threatens Global Yen Carry Trade
Japan's sudden increase in borrowing rates is causing worry worldwide.
For a long time, people borrowed money in Japan at very low rates and made a profit by investing it in other countries.
Now, this is becoming harder to do, and people are worried about losing money.
Japan is doing this because prices are rising faster than usual, but wages are not keeping up.
Japan's borrowing rate surged to 2.8%, its highest in 30 years
This ends the once-lucrative 'Yen Carry Trade'
Global markets are on edge due to potential investor panic
Japan's inflation rate crossed 2.5% for the first time in 25 years
Bank of Japan raising rates to cool demand and rein in prices
- Who
- Global investors, Bank of Japan
- What
- End of Yen Carry Trade, Japan raising interest rates
- When
- November 19, 2024
- Where
- Japan, global markets
- Why
- To cool demand and rein in inflation
Investors
Bank of Japan
Rate Increase
Investors
Worried about losing profit and potential market panic
Bank of Japan
Necessary to control inflation and demand
- Previous Rate
- Near 0%
- Current Rate
- 2.8%
- Japan's Debt to GDP Ratio
- 2.5x
- Inflation Rate
- Over 2.5%
- Last Rate Hike
- August 2024