This is a good analysis of the yen carry trade but i'd argue the causality is backwards. Record high margin debt in the U.S. is the root cause as it's a powder keg. The yen is just the fuse being lit. When system-wide leverage is this extreme, any funding sock (whether it's the BOJ rate hikes, hawish fed, or geopolitical event) can initiate the liquidation cascade. The yen carry trade is one source of that leverage but the fragility was baked in. If Japan didn't do anything something else would have cause the liquidation cascade, only a matter of time.

The real story isn't Tokyo, it's that Wall Street built a house of cards and ran out of steady hands.

I have a public ThetaEdge card that monitors margin debt and calculates the correlation with the S&P here:

https://thetaedge.ai/public/thetix-card/42d9c6de-218d-4627-a...