Clearing the tabs …
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“The selloff in Tokyo extended last week’s rout that followed the Bank of Japan’s decision to raise interest rates. That move pushed the yen higher relative to other currencies. Disappointing economic data in the U.S. stoked the selloff, unwinding a popular Wall Street bet known as the carry trade.
“For years, investors around the world bought riskier assets, such as U.S. stocks, and funded the trades with the yen, thanks to ultralow interest rates in Japan. Until recently, many hedge funds and money managers expected rates to remain low and the yen weak.
“Instead, the strengthening yen has squeezed the carry trade. Investors who borrowed yen to fund their bets have been forced to buy more of the currency by bankers insisting on additional collateral. That is pushing the yen even…
