Japanese market shock threatens to spill back to US
Sudden unwinding of carry trade could impact Fed decision-making, analysts say
Weaker-than-expected US jobs data on August 2 has triggered sharp moves in markets worldwide that threaten to spill back to the US and could affect decision-making by the Federal Reserve.
Japan suffered particularly acute market moves. The Topix stock index plunged 12% today (August 5), while the yen leapt more than 2% against the dollar for a total rise of more than 5% over the past week. Surging demand for Japanese government bonds drove the benchmark 10-year yield from 1.06% on July 31 to 0.75
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