BANGKOK — The mayhem that swept across world markets this week was partly caused by a market strategy known as the “carry trade.” [time-brightcove not-tgx=”true”] Japan’s benchmark Nikkei 225 plunged 12.4% on Monday and markets in Europe and North America suffered outsized losses as traders sold stocks to help cover rising risks from investments made using cheaply financed funds borrowed mostly in Japanese yen. Markets recovered much of their losses on Tuesday.

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