Yen Carry Trade Unwind: Is It Really Over?

The unwind of the Yen carry trade has led to a significant breakdown in the USDJPY, shattering the ascending channel that had been in place since early 2023. We're now witnessing a retest of the channel's lower bound, where crucial resistance levels come into play. As asset managers continue to unwind their short Yen positions to mitigate risk, we may see a sustained strengthening of the Yen, potentially driving the USDJPY even lower.