TFTC: A Bitcoin Podcast #707 The Yen Carry Trade Unwind Could Crash U.S. Markets with Infranomics
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Jan 24, 2026 Robert (Infranomics), a macro analyst focused on global bond markets and monetary policy. He unpacks Japan’s yield curve blowup and the risks to U.S. Treasuries. He explores how a yen carry unwind could force Treasury selling and reshape global reserves. He compares gold and Bitcoin as portable stores in a fiscally fragile, polarized world.
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Japan's Debt Structure Dampens Domestic Shock
- Japan runs a large current account surplus and owns many dollar assets, cushioning domestic fallout from its yield moves.
- The Bank of Japan holds ~50% of JGBs and foreigners own only ~12%, reducing immediate external contagion risk.
Yen Carry Reversal Threatens U.S. Bonds
- The yen carry trade funded U.S. Treasuries and equities by selling yen to buy dollars and Treasuries, amplifying liquidity.
- If Japanese rates rise, that flow can reverse, pressuring U.S. bonds, raising yields, and weakening U.S. equity markets.
Shrinking Trade Deficit Shifts Dollar Role
- The U.S. trade deficit has shrunk dramatically, reducing dollar outflows that historically funded global dollar liquidity.
- Prioritizing domestic reindustrialization signals a shift away from reserve-currency obligations and alters global settlement dynamics.