Japan is a significant source of leverage funds worldwide, primarily providing cheap capital through "Yen Carry Trade" to global markets.

The following is a detailed analysis:
Basis of Low-Interest-Rate Policies

Since the burst of Japan's economic bubble in the 1990s, the Bank of Japan has implemented long-term zero interest rate, negative interest rate, and quantitative easing policies, maintaining short-term interest rates near zero or even negative. This ultra-low interest rate environment has made the yen the world's cheapest financing currency, laying the foundation for arbitrage trading.

Yen Carry Trade Mechanism

Investors borrow yen at extremely low interest rates, then exchange it for high-yield currencies (such as USD, AUD) or invest in high-return assets (such as US stocks, US bonds, emerging market assets), profiting from interest rate differentials and asset appreciation. Because the cost of funds is almost zero, investors often leverage heavily to amplify returns, making this process a major source of leverage funds globally.

Scale and Impact of Funds

It is estimated that the scale of Yen Carry Trade once reached trillions of dollars, becoming a vital support for liquidity in the global financial markets. These funds have driven the rise of global stock markets, bond markets, commodities, and cryptocurrency markets, especially during periods of low interest rates, serving as a key driver of rising risk asset prices.

In summary, Japan's long-term low-interest-rate policies and Yen Carry Trade have provided a large amount of cheap capital to the global leverage fund market, exerting a profound influence on global asset prices and financial market liquidity.