Yen Intervention Triggers Tech Stock Selloff Amid Rising Loan Costs

The US and Japan have intervened to prop up the yen by buying it, causing the USD/JPY exchange rate to briefly drop from above 163 to around 155.

This intervention has significant implications for US equities, as many investors had borrowed low-yielding yen to invest in US stocks and Treasuries.

With the yen now strengthened, these loans have become more expensive to repay, prompting some investors to sell part of their equity holdings and reduce exposure to highly valued tech stocks, which are often hit first.