Borrowed Yen: The Carry Trade Mechanics and How Cheap Japanese Money Built a House of Cards in Global Finance

For decades, the Bank of Japan has kept its interest rates at or below zero to fight off deflation. While intended to stimulate the domestic economy, this policy accidentally birthed one of the most powerful and dangerous strategies in global finance: the Yen Carry Trade. It sounds simple: borrow money in Japan where it costs nothing, and invest it in high-yielding assets like American tech stocks or Mexican bonds, pocketing the difference.

Borrowed Yen dissects the invisible, multi-trillion...