Axios’ Post

Breaking down today's market mayhem — Axios style. What happened: Japanese stocks saw their worst day today since 1987 as Japan's currency soared to a seven-month high against the U.S. dollar — triggering a selloff in global stocks. Why it matters: There's an unwinding of the popular "yen carry trade" happening "at lightning speed" that will continue to cause volatility until it's over, Art Hogan, chief market strategist at B. Riley Wealth, told me. Context: Investors have been borrowing cheap yen in Japan, where interest rates have been stuck at zero, and buying higher yielding assets in other countries with predictable returns, such as U.S. stocks (primarily Big Tech names) and bonds. The latest: Well, that approach recently lost its appeal, as the value of the yen has risen in recent weeks and after Japan's central bank raised rates last week. What they're saying: Wall Street is clamoring to figure out what the historic meltdown in a very large and important economy means and who is exposed to it, Callie Cox, chief market strategist at Ritholtz Wealth Management, told me in an interview, about the selloff in Japan. The big picture: While the unwinding of the yen carry trade was the main fuel for today's market meltdown, according to Hogan, profit taking, concerns about the direction of the U.S. economy given Friday's U.S. jobs report and a traditional calendar cycle of selling in August and September also factored into the equation. More in my post here: