Yen rates losses from tariff drama top $1 billion
Pay fixed, curve flattener and vol steepener positions were hit hard as yields swung wildly
Banks and hedge funds suffered big losses on Japanese interest rate positions after US president Donald Trump’s tariff announcement on April 2 sent yen yields on a rollercoaster ride.
The losses, which a senior rates trader at a European bank estimates at more than $1 billion across banks and hedge funds, came from forced unwinds of leveraged linear and options-based bets on Bank of Japan rate
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