Can anyone help explain the USDJPY carry trade, and it's implication on the S&P 500?
I've been following the USD/JPY and it's impact on the SPX, so far it looks like the SPX lags the USDJPY almost perfectly, minus any calamity. I know the zero interest rate on the JPY allows investors to take out interest free loans and throw it into foreign assets, such as the S&P 500/SPX. I'm just not sure there's more to this or I'm missing something. Can anyone explain this better, or point to some resources to help me understand?
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