was hoping someone would elaborate on the topic... however, I was able to find link below if anyone else was wondering about same question. http://ratesofinterest.wordpress.com/2014/01/24/about-the-overnight-carry-trade-implosion-basics/
USDJPY carry trade doesn't move the S&P. There's a correlation (assumed or otherwise) between the two, because both are proxies for risk appetite.
There isn't really even all that much of a correlation. They've been moving together for the past few weeks to months and Zerohedge seized on it, that's all. There are fundamental reasons why both might move together somewhat: global risk-on means Japanese investors moving into foreign investments and therefore selling Yen, while foreign investors put on carry trades (borrow Yen, trade it into another currency and earn the yield spread between investments in the new currency and rock-bottom Yen borrowing costs). Risk-off sends both into reverse. However, other factors are clearly more important for long-term Yen direction. For instance the Yen strengthened in 2007-09, but also 2009-12, before dropping like a stone when Abe began promising inflation.