Nikkei 225 · August 5, 2024
The Yen Carry Trade Unwind
-12.40%
single-day change vs previous close
Part of a longer stretch
From the carry unwind to tariffs
early in it · 2024-07-11 → 2025-04-07, -26.26% over the whole period
What happened that day?
- 5 August 2024 — Nikkei 225 fell 12.4%. In index points, a bigger one-day drop than Black Monday 1987
- Background: the yen carry trade. Borrow yen cheaply in Japan, where rates were near zero, and invest where yields are higher
- For years it worked like almost-free funding
- Late July, the Bank of Japan raised rates and the yen surged — the maths flipped. Borrowed money suddenly got expensive
- Closing a position means selling assets to buy yen back → that buying pushed the yen higher → forcing more unwinding
- Fell 25.5% from the 11 July peak, then steadied fairly quickly
- Japan's economy hadn't broken. One financing structure had
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.