Yen surges to seven-month high, reigniting carry-trade unwinding fears

The Japanese yen $JPY has climbed to a seven-month high against the dollar $USD, driven by mounting bets on a Bank of Japan $BOJ rate hike in September. The rally revives concerns about an abrupt unwind of the yen-funded carry trade, which has underpinned global risk appetite.

The move compounds broader market volatility, with Treasury yields rising and geopolitical tensions weighing on equities. Analysts warn the yen's strength could trigger a cascade of liquidations across leveraged positions globally.

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