What is the carry trade and why did it cause market chaos?

The yen carry trade unwinding was a big factor in the Monday sell-off. It started after the Bank of Japan raised its interest rates. Market Domination Co-hostbreaks down what a carry trade is and its role in the global market meltdown seen in Monday's trading session.Stocks selling off over the last couple of trading days, and one of the reasons cited is the unwind of the so called carry trade to discuss Yahoo Finance Market domination.

Basically, this big decline, which is in the dollar versus the yen, came after the Bank of Japan last week raised rates there to a quarter percent.But we had seen the Japanese, the Bank of Japan holding it zero to 0.1% and even before the spring, had negative interest rates.That is what has spurred that big big move, especially as it is in contrast now with the Federal Reserve, which is getting closer to cutting rates.So let's go back to that other chart that we were looking at.

So you see that sharp move in the yen that then leads some of this unwinding and the size here of it gives you an idea as to why it contributed So, um, dramatically to some of the selling at least that we saw here in the US.Um, we talked to Ed Yardeni of Yardeni Research the other day, and he expressed some optimism that it was getting closer to working itself out.

There's a lot of this week we're trying to figure out exactly how it's gonna play out, but it is definitely not unanimous in terms of thinking It's gonna be quickly done, Brad.Stocks bounce back as investors await Airbnb, Reddit earnings : Yahoo Finance Aypa Power , a Blackstone portfolio company that builds, owns, and operates utility-scale energy storage and hybrid renewable energy projects across North America, has secured $323 million in financing commitments for its Kuna project. The 150-megawatt / 600 megawatt-hour facility, located in the City of Kuna just outside of Boise, will be the largest battery energy storage project in Idaho when it comes online in mid-2025.

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