USDJPY: The Most Important Chart in the World

USD/JPY is presented as the most important chart in the world because it reflects interconnected global debt and carry-trade dynamics. The yen fell about 12.5%, from 140 to 160, between early 2024 and July, prompting Japanese authorities to spend around $50 billion of their dollar reserves buying yen. Japan's debt-to-GDP ratio is cited at 260%, and Japan is described as the largest holder of US Treasuries at $1.1 trillion. A 0.25% rate rise by the Bank of Japan on July 31, 2024 made the carry trade less profitable, unwinding leveraged positions and causing a market selloff.