The Japanese yen has strengthened to about 153 per dollar, down roughly 4% from the start of the month and 2% since the beginning of the year, reviving concerns about a renewed carry-trade unwind. The dollar-yen pair had reached nearly 164 in late July, a four-decade high. Investors who borrow cheaply in yen to buy higher-yielding currencies and riskier assets can face losses as the yen rises, potentially forcing them to sell stocks, bonds and funds to cover positions. Analysts identified heavily owned AI and semiconductor shares, expensive software and momentum stocks, small-cap and leveraged companies, foreign bonds and Japanese exporters as potential pressure points. Japanese bonds have already sold off, pushing the benchmark 10-year yield to its highest level in three decades, while higher domestic yields and a stronger yen could encourage Japanese investors to repatriate overseas capital. The Nikkei 225 fell 12.4% on Aug. 5, 2024, during a previous carry-trade unwind. The current move has been driven mainly by domestic Japanese factors, and emerging-market assets and carry trades have remained resilient, but analysts at MUFG and ING say the risk of a broader unwind remains. JPMorgan Securities Japan previously said yen strength could ease pressure on Japanese government bond yields and support Tokyo-listed AI, semiconductor and real estate stocks, while warning of earnings pressure for transportation, logistics and automobile companies.