🚹 Japan just cranked up interest rates again, and it’s about to shake the whole world’s money game. For years, Japan’s zero-rate vibe kept its massive $10T debt chill, but now yields are spiking, debt costs are exploding, and fiscal room’s vanishing. That’s a recipe for default, restructuring, or crazy inflation — no easy out.

Japan’s got trillions parked abroad — over $1T in US Treasuries and tons of global stocks. With domestic bonds finally paying real returns, those foreign assets look weak after currency hedges, so money’s gonna flow back home. That repatriation could suck hundreds of billions out of global markets, creating a liquidity crunch.

And here’s the kicker: the yen carry trade — over $1T borrowed cheap in yen and tossed into stocks, crypto, and emerging markets. As rates rise and yen strengthens, those trades unwind fast, triggering margin calls and forced selling. Everything could tank together.

Meanwhile, US-Japan yield gaps shrink, Japan’s less likely to fund US deficits, and US borrowing costs climb. If BoJ hikes more, yen spikes, carry trades blow up harder, and risk assets get hammered. Japan can’t just print money either — inflation’s already high, and printing weakens yen, raising import prices and domestic pressure.

Wild times ahead, watch your portfolio. đŸ“‰đŸ’„đŸŒ

What do you think — is this the start of a global market shakeup or just a blip?