**Rising Japanese yields are disrupting the global carry trade**, potentially triggering massive capital flows back to Japan.
For years, investors borrowed yen at ultra-low rates to fund investments worldwide. Now, as **funding costs climb**, this cheap money may reverse course.
Key impacts:
- Tightening liquidity across all risk assets
- Pressure on crypto markets
- Potential unwinding of leveraged positions
Short-term Japanese yields hit **2008 highs**, strengthening the yen and already pressuring crypto during Asian trading hours.
The carry trade unwind could reshape global markets as **trillions in borrowed capital** seeks higher-yielding Japanese assets.