"The prisoner’s dilemma for global fund managers: unwinding yen carry trades has triggered the biggest nuke for global risk assets. This morning, following the Bank of Japan’s rate hike remarks, we saw a simultaneous rise in Japanese bond yields and the yen’s exchange rate against the dollar. In the past, global hedge funds collectively borrowed tens of trillions of ultra-low-interest yen (almost 0 interest) and converted it into dollars to buy massive amounts of U.S. risk assets, including U.S. stocks and $BTC. Now, with the Bank of Japan announcing rate hikes + the yen surging, this has led to skyrocketing borrowing costs + ballooning repayment amounts → fund managers receiving margin call notices → selling off risk assets to reduce positions. The result: You sell dollars to buy yen → the yen appreciates even more → borrowing costs for others rise → more people get liquidated → more people dump dollar assets → the yen appreciates even more crazily! This isn’t just a normal drop;