As forex markets await political shocks, one tipping point could lead to a 'catastrophic trade' that unwinds markets

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• The foreign exchange market remains quiet despite global geopolitical and economic shifts.
• The yen carry trade unwind in August led to a temporary market pullback and recovery.
• Japanese pension fund may face challenges as the yen strengthens, impacting foreign investments.

The foreign exchange market has been eerily quiet since the yen carry trade unwind.

The realized volatility in most currency pairings is incredibly low.