Recent developments in the financial markets indicate a potential flash crash driven by the Yen carry trade. Following Japan's interest rate hikes, which raised rates from 0.1% to 0.25% in August 2024 and further to 0.5% recently, stock futures are experiencing significant declines. The latest increase has pushed 2-year yields to 0.71%. Investors are reacting to these changes by moving towards safe-haven assets, resulting in a surge in the Japanese yen and Swiss franc, while the US dollar has weakened. This risk-off sentiment is attributed to concerns surrounding DeepSeek, which appears to be exacerbating market volatility.