The dollar yen carry trade causes a rising U.S. dollar, rising U.S. bond prices, rising U.S. stocks, and deflation in commodity prices. Of course, an unwinding of this carry trade will cause the opposite.

The unwinding is likely to be felt everywhere. Like the housing market was a bubble that created havoc across the economy when it exploded, this dollar yen carry trade could be of similar bubble proportion and create similar havoc when it is unwinded too fast.

So on top of that, as Mylchreest shows, there was a long Nikkei-short gold trade, that will be unwinding as well. That gives gold market movements on steroids.

I guess the 16 december election in Japan has some high stakes for outsiders as much as Japanese themselves. I wonder what policy options are left for the Japanese, since their debt is 250% of GDP and growing fast.