AI Stock Bubble Risks Collapse if Yen Rebounds, Fueled by Carry Trade
Updated
Updated · South China Morning Post · Aug 8
AI Stock Bubble Risks Collapse if Yen Rebounds, Fueled by Carry Trade
3 articles · Updated · South China Morning Post · Aug 8
Summary
A weak yen has become a key prop for the AI-driven stock boom, with cheap Japanese funding helping push money into tech shares.
That support could reverse sharply if the yen strengthens, because the same carry trade that inflated valuations would unwind and pull capital out of the market.
The report argues that even as trade and politics split into rival blocs, capital still moves freely across borders and can amplify instability in the real economy.
The broader risk is that a currency shift—not just earnings or AI fundamentals—could trigger the next break in overheated tech markets.