Why the Yen Carry Trade Is Unraveling in Mid-2026

Lucas and Luna explore the unraveling of the yen carry trade in mid-2026. With the yen strengthening to 160.9 per dollar and Japanese ETFs like EWY down 3.3% in a week, the hosts explain why the classic carry trade is becoming unprofitable. They dive into the mechanics: how leveraged investors borrowed yen to buy emerging-market assets, and why the Bank of Japan's rate hikes and the Federal Reserve's cooling cycle are reversing the flows. Specific data points include the yen's 1.5% gain against the dollar in five days and the impact on emerging-market ETFs like EEM, which fell 1% in the same period. The episode connects these moves to the broader theme of dollar weakness and global capital rotation, offering a concrete example of how currency shifts ripple through portfolios. #YenCarryTrade #JapaneseYen #EmergingMarkets #EWY #GlobalCapitalFlows #BankOfJapan #FederalReserve #CurrencyMarkets #USDJPY #ETF #EEM #PortfolioStrategy #DollarWeakness #CarryTradeUnwind #Economics #GlobalEconomy #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo