STOCKS | Saxo Warns Stronger Yen Could Trigger Global Equity Unwinding

Saxo Markets said a stronger yen against the U.S. dollar could trigger the unwinding of some crowded, highly leveraged positions in global equities. According to Sina Finance, Saxo Markets' chief investment strategist in Singapore, Charu Chanana, said high-valuation software stocks, AI-related semiconductor shares, and interest-rate-sensitive stocks such as real estate investment trusts face potential risks. In a report, Chanana wrote that the most vulnerable areas are where high valuations, crowded positioning, high leverage, and low liquidity overlap. She added that investors have long borrowed yen at very low cost and deployed the funds into higher-yielding currencies and risk assets, and that funds facing losses or higher margin requirements may first sell their most liquid and profitable holdings regardless of whether company fundamentals have changed.