The yen carry trade, a popular strategy among investors, faced significant turmoil in August 2024 as the Japanese yen surged. This surge was attributed to actions by the Bank of Japan (BoJ), which has been tightening monetary policy while other central banks continue to ease. The resulting squeeze led to notable changes in commercial trades of yen currency futures, with traders shifting from a balanced long and short position to a more aggressive stance. Estimates suggest that the overall size of FX carry trades was around ¥40 trillion (approximately $250 billion) before the disruption. The fallout from the yen's appreciation has affected various markets, including stocks, credit, and emerging currencies, raising concerns about potential policy errors by the BoJ reminiscent of the 2008 financial crisis. At that time, the yen had risen 40% due to similar policy missteps, and analysts are wary of a repeat scenario if the BoJ does not align its policies with global monetary conditions.