A carry trade involves borrowing in a currency with a low interest rate (the "funding currency") and using the proceeds to hold assets denominated in a currency with a higher interest rate, pocketing the difference. The Japanese yen has been the textbook funding currency for years, given how long Japan held rates near zero, while higher-yielding currencies on the other side of the trade have varied over time.
Because carry trades are built specifically around the gap between two rates, even a modest hike in the funding currency can meaningfully erode the trade's profitability — and when enough traders decide a carry trade is no longer worth holding, the unwind (selling the higher-yielding asset, buying back the funding currency) can move markets quickly, well beyond what the rate change alone would suggest.