Consider this article in the context of the Japanese Finance Minister's comments this morning. He basically said they have no idea how large the YCT is, but that it may be "many times larger" than anyone knows of. http://ftalphaville.ft.com/blog/2007/03/01/2862/how-the-carry-trade-unwound-the-markets/ How the carry trade unwound the markets China may have had a lot/nothing at all to do with Tuesdayâs global markets rout - but Japan also had a part to play, reports the Wall Street Journal. Their argument: blame an unwinding of the carry trade. While concerns about the US economy and overheated stock markets around the world helped trigger market drops Tuesday, investors told the WSJ the unwinding of yen loans accelerated the declines. âIt is likely that when some investors grew nervous, they began to sell their holdings in everything from Indian stocks to the Australian dollar and used the proceeds to buy yen to pay back their loans,â the WSJ said, noting the rush to buy yen pushed up the value of the yen against the dollar by more than 2 per cent on Tuesday. âEverything that happened was consistentâ with the unwinding of carry trades, Jay Bryson, global economist with Wachovia Corp told the WSJ. âWe had the Japanese yen strengthening and high-yielding currencies declining.â Mr Bryson thinks such unwinding could continue over the next week or two if investors reduce their positions in stock markets that have posted big gains in recent months. Asian contagion, anyone?