Navigating Currency Risk – The Impact of Black Monday 2024 on Yen Carry Trades and Bank FX Exposures
Japan’s 2024 “Black Monday” crash shook global markets after the Bank of Japan’s surprise rate hike and unwinding of yen carry trades. Could this signal a new era of global market volatility?
At a glance
Countries Focused
Japan, U.S.A, Malaysia
Phenomenon
Black Monday
Year
2024
Focus
Foreign Trading, Interest Rate Parity
Abstract
On August 5, 2024, Japan’s “Black Monday” rattled global markets when the Bank of Japan unexpectedly raised interest rates for the first time in 17 years. The move upended decades of reliance on the yen as the world’s cheapest funding currency, triggering the unwinding of trillions in carry trades, a historic Nikkei 225 sell-off, and sharp yen appreciation that rippled across Wall Street and Asian markets.
This case study traces the crisis back to diverging monetary policies, speculative bets, and structural weaknesses in Japan’s economy. The collapse of the yen carry trade revealed the fragility of global finance, with the U.S. dollar plunging 8.5% and Malaysia’s KLCI falling nearly 5% in a single day. At the center was Maybank Berhad, Malaysia’s largest bank, whose forex exposures and hedging strategies were put to the test. Despite nearly RM700 million in translation losses, Maybank’s mix of natural hedging and derivatives highlights how multinational banks navigate sudden financial shocks.
All rights reserved. © 2025 Nikkei Business Lab Asia. No part of this publication may be copied, stored, or transmitted in any form. Copying or posting is an infringement of copyright.
Disclaimers:
(1) Regarding Case Study Content: This case study is based mainly on secondary data and analysis of publicly available information unless otherwise stated, and is intended solely for educational purposes. Any opinions expressed by the author(s) are designed to facilitate learning discussion and do not serve to illustrate the effectiveness of the company. Additionally, banner images and logos used in the case study are intended for visualization in an educational setting and it is not used to represent or brand the company. For any dispute regarding the content and usage of images and logos, please contact the team.
(2) Regarding University Affiliation and Titles of Authors: The university affiliation and titles of author(s) seen in the case study is based on their affiliation and title during the time of publication. It may or may not represent the current status of said author(s).
