Japan Is ‘Insolvent’: Yen Unwind Threatens Global Markets | Michael Gayed

In this episode of the podcast, Michael Gayed discusses Japanese bonds and their impact on global treasuries and markets. He explains the unwinding of the yen carry trade, where investors previously borrowed yen at low rates to invest in higher-yielding foreign assets, but are now reversing this due to rising Japanese interest rates. This shift could lead to a selloff in foreign assets as investors move capital back to Japan. Gayed also touches on the potential for the Bank of Japan to intervene, the correlation between the U.S. dollar/Japanese yen exchange rate and the Nasdaq, and the possibility of a credit risk event. Looking ahead, he suggests healthcare and biotech as promising sectors, along with regional banks, while also noting the risks in private credit. He emphasizes the importance of monitoring credit spreads as an indicator of market volatility and highlights the potential for a housing correction.