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Speaker 1: It looks like share markets around the world have stabilized

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Speaker 1: after making those big losses over the last couple of

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Speaker 1: days or so. Over the last few hours, the nick

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Speaker 1: has bounced back. It's sitting almost ten percent higher than yesterday. Currently,

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Speaker 1: Australia and South Korean markets are also up. The INSIDEX

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Speaker 1: had dropped early in trading since has since climbed back.

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Speaker 1: Matt Goodson is managing director at Salt Funds Management and

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Speaker 1: with us Now Hoy.

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Speaker 2: Matt Afternoon Heat.

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Speaker 1: What's prompted the recovery?

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Speaker 2: Look, I think yesterday's sharp move, especially in Japan, really

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Speaker 2: felt like force selling from funds that had too much exposure,

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Speaker 2: and we're just forced to do risk and so we've

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Speaker 2: just seen a bit of a natural rebound from that.

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Speaker 2: But the real weakness in Japan started a few days

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Speaker 2: ago when the central Bank finally hiked after years of

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Speaker 2: zero rates, moving up to a quarter of a point

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Speaker 2: in cash right and making some pretty hawkish comments about

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Speaker 2: the future. And that really a Japanese market had been

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Speaker 2: pretty strong all year of a yeen have been really weak,

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Speaker 2: and that just turned everything around. Market fell hard and

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Speaker 2: the yen really strengthened.

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Speaker 1: Do you think this is the end of the jesses

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Speaker 1: or do we potentially have more to come.

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Speaker 2: Look, there's several different things going on at the moment,

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Speaker 2: so I think it's too early to say it's the end.

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Speaker 2: The biggest impact from Japan is actually the implications for

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Speaker 2: global markets. There's been a multi trillion dollar trade going

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Speaker 2: on for years, known as the carry trade, where people

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Speaker 2: have borrowed at zero in Japan, geared that up a

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Speaker 2: few times and invested in much higher yielding assets overseas.

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Speaker 2: I think American banks, Australian banks, those sorts of things.

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Speaker 2: Now all of a sudden they have to pay a

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Speaker 2: bit more to borrow that money, and more importantly, they

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Speaker 2: have to pay it back and much more expensive yen.

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Speaker 2: So all of a sudden, a lot of those carry

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Speaker 2: trades have been unwound. And that's why we saw well

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Speaker 2: one of the reasons why we saw US and Australian

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Speaker 2: market's been really hard hur yesterday.

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Speaker 1: Matt, it's very good to talk to you. Thank you

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Speaker 1: so much for that, Matt Goods and Salt Funds Management

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Speaker 1: Managing Director.

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Speaker 2: For more Heather Duplessy Allen Drive. Listen live to News

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Speaker 2: Talk set B from four pm weekdays or follow the

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