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?

Comments (1)

Oct 24, 2018
Comment