The Carry Trade That Could Break the Treasury Market: Inside Japan’s Yen Defense and the 2026 Unwind Risk

The carry trade that funds half the world’s risk appetite is already back near record size — and this time the exit runs straight through the US Treasury market.

Intervention bought Tokyo three weeks.

The carry trade that funds half the world’s risk appetite is already back near record size — and this time the exit runs straight through the US Treasury market.

By Dorian

At 11:33am on July 31, a Reuters photographer at Camp David caught Treasury Secretary Scott Bessent’s notepad. Six words, visible over his shoulde…