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Bank of Japan Rate Hike Changed Everything | Is a Stock Market Crash Next? | Martyn Lucas Investor

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3,518 views228likes2:39:12MartynLucasInvestorOriginal Release: 2026-07-22

The yen carry trade involves investors borrowing Japanese yen at near-zero interest rates and investing in higher-yielding assets globally, such as US stocks, treasuries, and crypto. When the Bank of Japan raises interest rates, the yen strengthens, forcing investors to repay their loans in yen, which triggers a cascade of selling across global markets. This mechanism can cause rapid, violent market corrections as all carry traders simultaneously unwind their positions, potentially leading to crashes significantly larger than historical events like the housing bubble.