The Dollar-Yen Carry Trade and Why the Bank of Japan Backtracked

As we reported in the last issue (cf. SAS 32-33/24), a minimal increase of interest rates by the Bank of Japan, from 0% to 0.25%, was the trigger for the stock market meltdown worldwide in early August. The fact that such a micro change in the cost of money by a G7 central bank could unleash a syste