TOMORROW'S BOJ DECISION COULD WIPE OUT BILLIONS FROM GLOBAL MARKETS. Here's why: The Fed's rate sits at 3.5-3.75% and the BOJ's sits at just 1%. That gap is why the yen carry trade exists in the first place, borrow cheap yen, buy higher-yielding dollar assets. Morgan Stanley estimates roughly $500 billion in yen-funded carry positions are still outstanding. Japan's unemployment data comes out tomorrow too, expected at 2.5%. If it comes in below that, it gives the BOJ room to hike more aggressively in its decision the same day. If it comes in as expected or higher, the BOJ has less reason to surprise anyone. A bigger hike narrows that rate gap fast. That's the exact trigger that caused August 2024's carry trade unwind, when the Nikkei crashed 12.4% in a single session, its worst day since 1987, erasing about $790 billion. If the BOJ hikes but sounds cautious instead, none of that pressure builds, and today's yen strength likely fades back to where it started. This matters more than yesterday's FOMC decision.