Global Central Bank PolicyMonetary Policy

Japan ends decades of ultra-loose policy; yen carry trade unwinds

_Economics/__Global Finance

Summary

The Bank of Japan raised its policy rate toward zero — the first meaningful rate increase in decades — ending the world's longest ultra-loose monetary policy experiment. The move triggered the unwinding of the global yen carry trade, causing brief but severe volatility in equity and bond markets.

The BoJ's rate decision, the carry trade mechanics, and the global market impact of yen strengthening.

Historical analysis of Japan's decades of near-zero rates and what normalisation means for global capital flows.

How this connects

↑ Upstream

Liberation Day tariffs ignite stagflation trap

US–China Strategic Competition

Caused
↑ Upstream

Ukraine war triggers energy supply shock

Russia–Ukraine War

Caused
↑ Upstream

Middle East escalation raises energy risk

Israel–Gaza–Iran War

Caused
↓ Downstream

Rate hike pain drives far-right electoral surge

Western Democratic Fragility

Triggered