The steamroller has finally arrived. In February 2007, the Financial Times warned that carry trades – borrowing in a currency offering low interest and investing in high-interest currencies – might look attractive but were also extremely risky: like having a free lunch in front of a steamroller. Even a relatively small appreciation of the loaned currency might wipe out any gains from the trade, or worse.

As interest rates look set to be slashed around the developed world and risk-appetite slumps further, carry trades – largely involving the Japanese yen – are being unwound. Money is pouring back into Japan, raising the value of its currency. The speed at which the steamroller approached surprised many. Not everyone will manage to scramble out of the way in time.