3/3
Has this scenario happened before?
Yes, partially:
• 2024: Sudden rate hike by BOJ → Major Yen Carry Trade unwind and global market volatility
• 2025-2026: Continued rate hikes + Japanese interventions involving sales of US Treasuries
• 2008: Global financial crisis linked to Carry Trade unwinding
The scenario has repeated… but it hasn’t yet turned into a full-blown crisis.
#Yen #USDebt #GlobalEconomy #Japan #Fed
🧵 1/3
This is very interesting:
• Japan is the largest foreign holder of US Treasury debt
• To combat yen depreciation, the Bank of Japan must raise interest rates
• But raising rates means Japan will sell US Treasuries to buy yen
• This year: $10 trillion of US debt is maturing and needs refinancing
2/3
If Japan sells large amounts of Treasuries:
→ Yields (interest rates) on new US debt will rise
→ A big problem for the United States
That’s why the Federal Reserve (Powell previously) tends to support Japan to avoid this scenario.
This is a dangerous Feedback Loop.
One strait closed. Two worlds emerged. The old factory model ran on cheap Asian labour + stable Gulf energy. The new one runs on domestic energy + political alignment with the dollar. The Americas have both. The divergence isn't starting. It's already in the data. /end 🧵
The world has one Strait. 33km wide. 20% of global oil passes through it. When Iran closed it on Feb 28, it didn't just spike oil prices. It split the global economy into two worlds. 🧵 One Strait. Two Worlds. (a thread)
$SATS just broke above resistance
Weeks of accumulation → now expansion.
If follow-through comes, this could start a strong trend.
Anyone else watching this breakout?
#QQQ