Possible scenario
Carry Trade Stress
20% Chance
A more adverse outcome is that the hike and intervention risk trigger a broader unwind of yen-funded carry trades. This would echo the 2024 BOJ surprise episode, though with smaller immediate shocks because markets have already adjusted to positive Japanese rates.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- Bitcoin Down
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Technology -2.7%
Portfolio impact
S&P 500-2.1%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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