This signals a return to pre-2022 liquidity conditions where yen carry trades funded 40%+ of global risk asset flows, but with critical new risks: the current $1.2T in yen-denominated carry positions is now concentrated among fewer institutions post-SVB collapse, making the system more fragile. Unlike 2020-2021, this revival coincides with $800B in US Treasury maturities this quarter, creating a perfect storm where a yen rebound could force fire sales of liquid crypto assets to cover forex losses.

Japanese Yen

Speculators have increased short positions on the yen to a nine-year high, signaling the revival of the yen carry trade.