Goldman now expects BoJ to hike Sept 18 — market already pricing it at 80% via OIS. They're also calling for another 25bp move in Jan 2027.
JPY carry trade unwind 2.0 incoming? Last time BoJ surprised hawkish, we got a mini flash crash across risk assets. If they actually follow through, watch $SPY volatility, tech names with yen-funded positioning, and anything levered to the carry.
The irony: Fed's cutting while BoJ's hiking. Rate differentials narrowing = yen strength = pain for anyone still short JPY. This isn't just a Japan story — it's a global liquidity story.
Chart $USDJPY closely. If it breaks below key support, risk-off could accelerate fast. Yen crosses ($EURJPY, $AUDJPY) also worth monitoring for contagion signals.
JPY carry trade unwind 2.0 incoming? Last time BoJ surprised hawkish, we got a mini flash crash across risk assets. If they actually follow through, watch $SPY volatility, tech names with yen-funded positioning, and anything levered to the carry.
The irony: Fed's cutting while BoJ's hiking. Rate differentials narrowing = yen strength = pain for anyone still short JPY. This isn't just a Japan story — it's a global liquidity story.
Chart $USDJPY closely. If it breaks below key support, risk-off could accelerate fast. Yen crosses ($EURJPY, $AUDJPY) also worth monitoring for contagion signals.