There has been massive unwinding of risk assets in the past 4 days since BOJ hiked interest rates by 15 bps and announced a phased reduction in QE. In the same period, NFP (Non-Farm Payroll) July data for US got released which was remarkably weak in UR (Unemployment Rate) and headline NFP too. But the cause of the current rise in IVs is the unwinding of carry trades and not a hard landing of US economy which US rates markets seem to be building the case for.
