The AI boom is cooling off while leveraged debt hits record highs, triggering yen carry trade unwinding alerts and intensifying market stress signals.

智通财经2026/07/28 19:06

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Although technology earnings reports are strong, concerns are arising over the profitability of AI and the sustainability of its enormous capital expenditures. The rally in the semiconductor sector has slowed, while the yield on AI company bonds is now rising faster than on Treasuries. Meanwhile, the cost of credit protection is climbing in tandem, putting credit quality under pressure.
Margin debt in June reached a record high of 1.5 trillion dollars, and for the first time, investors’ net balances at brokerages showed a deficit of around 1 trillion dollars. This highly leveraged market structure means that, in the event of a stock market decline, forced liquidation is more likely than dip buying.
The 30-year U.S. Treasury yield has remained above 5% for the longest period since 2007, pushing up mortgage and corporate lending costs. The spread on high-yield corporate bonds has risen to a 15-month high, accelerating credit stratification.
Although oil prices have pulled back from 100 dollars, on a dollar basis they are still up about 27% year-on-year. The import cost increases for the Eurozone, the UK, and India are between 30% and 40%, and freight rates for oil tankers on major Middle East-to-Asia routes have jumped about 600% year-on-year, keeping energy cost pass-through pressure high.
The Japanese yen is approaching 164 against the dollar, marking a forty-year low, as low interest rates and the expansionary fiscal policy of Prime Minister Fumio Kishida continue to exert pressure. The risk of carry trade unwinding is rising as intervention expectations build; a rapid yen appreciation could trigger a large-scale deleveraging chain reaction.

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The AI boom is cooling off while leveraged debt hits record highs, triggering yen carry trade unwinding alerts and intensifying market stress signals.

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