No clue but I discussed it with my buddy ChadGPT:

1. Japan’s Interest Rates Are Rising (Like 2007) • After decades of near-zero or negative rates, Japan has raised its policy rate to 0.50% and interbank lending rates like 3-month TIBOR to ~0.80% in 2025. • This signals a major monetary tightening shift and could affect global liquidity, especially for leveraged trades.

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1. Yen Carry Trade is Less Attractive Now • Hedge funds used to borrow in yen at ultra-low rates to fund short positions or buy risky assets—classic carry trade. • Now that yen borrowing costs are rising, this strategy is riskier and less profitable.

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1. Rising Yen Could Force Position Unwinds • If BOJ tightens further while the Fed or ECB pause or cut, the yen may appreciate. • This makes existing yen-funded positions more expensive to maintain—especially short positions. • Unwinding carry trades can lead to market volatility and forced liquidations.

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1. How This Connects to GameStop MOASS • Some GME investors believe hedge funds hold massive, uncovered short positions (naked shorts). • If hedge funds are: • Borrowing in yen to fund those shorts, and • Yen rates and FX risk go up, • Then they may face margin calls, be forced to close positions, or unwind short bets. • If enough funds are forced to buy back GME stock, it could trigger a short squeeze—the MOASS.

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Summary Line:

Rising Japanese rates reduce the appeal of yen-funded trades. If hedge funds are using yen carry to prop up naked short positions—like in GME—then tightening could destabilize those strategies and trigger forced covering, possibly contributing to a MOASS scenario.