As forex markets await political shocks, one tipping point could lead to a ‘catastrophic trade’ that unwinds markets

• The foreign exchange market remains quiet despite global geopolitical and economic shifts.
• The yen carry trade unwind in August led to a temporary market pullback and recovery.
• Japanese pension fund may face challenges as the yen strengthens, impacting foreign investments.

The foreign exchange market has been eerily quiet since the yen carry trade unwind.