The potential impact of yen-priced oil on the yen carry trade

A post interprets claimed off-the-record deals to secure Japan’s oil supply as a sign that some crude purchases could be settled in yen. The author argues that this would reduce yen selling and strengthen the currency, raising funding costs for the yen carry trade—investment positions financed through cheap yen borrowing. The post predicts that a sudden yen squeeze, alongside rising U.S. and Japanese bond yields, could force leveraged positions to unwind.