Japan's currency is COLLAPSING

The Japanese Yen is crashing right now and the US officially stepped in. But by doing so they might wipe out trillions of dollars from US stock markets. Let me explain. In an unprecedented move, the US government just sold euros to buy Japanese Yen in record amounts. This is because the Japanese Yen has gotten very weak over the past decade because the Bank of Japan keeps interest rates at around 1%. Now in the past, this has actually been very good for US markets for one reason. US traders can borrow Yen from Japan at near zero interest rates and buy US stocks and bonds with it. Net short Yen positions sit at $11.65 billion, close to a two year high. When USD/JPY falls fast, those loans get more expensive and positions are closed by selling what they bought. August 2024 showed how that looks. One BOJ rate hike pushed USD/JPY down, and stocks and crypto crashed hard. From here, there are two outcomes. A fast drop in USD/JPY forces every asset fund to sell money. Because the Japanese Yen is always decreasing against the US Dollar, it's very cheap to pay off this debt. But it's all crashing with the US. Stick with me. The record bank of Japan actually put $73 billion directly back into buying back their currency and in just one day the Yen grew 3.3% stronger against the US Dollar. The biggest one day gain in history. Obviously huge. This billions selling to losses. Yen rates. Can't into things from the grew 3.3% against dollar day history. Every asset you own was partly financed in Tokyo. That funding is being withdrawn. For thirty years Japan lent the world money for free. Zero rates. Yield curve control. A currency engineered to sink. So capital did the obvious thing: borrow yen at nothing, sell it, buy Treasuries, Nasdaq, emerging market debt, Mexican pesos, credit, anything with a yield, add leverage, repeat until the trade became invisible. Until it was simply the water global markets swam in.