Japan inflation hits 1.4%, missing expectations of 1.7%. For investors, this is good news. Why? Three words: Japan Carry Trade. Japan’s interest rate is 0.75%. This allows for massive arbitrage trading in foreign markets like US Treasuries, the S&P 500, and crypto. Low inflation gives the Bank of Japan a reason not to raise rates. This keeps Japanese investors from pulling their capital, estimated at up to $2 trillion, back home. It prevents the domino effect that would cause global markets to dump. But don't pop the champagne just yet. The Bank of Japan is forecasting significantly higher inflation for fiscal 2026, driven by rising oil prices tied to the Middle East conflict. If that plays out, a rate hike comes back on the table, which could potentially lead to the Carry Trade unwinding.(Lark Davis)