Roger Nusbaum submits: A few weeks ago I posted concern that if the yen were to strengthen in a meaningful way it could cause problems of some magnitude as the cheap, cheap money in Japan greases a lot of different wheels.
Turns out Dr. Brett did the heavy lifting to quantify yen's impact. A strong yen, as Brett qualifies it, has lead to an average S&P 500 decline of 40 basis points. You need to read his post to get the full context.
I doubt a hike to 50 basis points in Japan will destroy the carry trade and cause any LTCM-like blowups, but it could be a trigger point for something normal in the way of a correction.
If not, great. But this bears watching as the yen has strengthened in the last few days.