🚨 MARKET ALERT | Japan Rate Shock Incoming 🇯🇵💥
Bank of America signals the Bank of Japan may hike rates to 1.00% in April — a level not seen since the mid-1990s.
📌 Why it matters:
• Japan is a cheap-money hub & major global holder
• Last time rates hit this zone:
• 1994: “Great Bond Massacre” wiped $1.5T from bonds
• USD/JPY collapsed to ~79.75
• Global stress stacked; cuts followed later
💡 Transmission Mechanism:
• Japan holds $1.2T in U.S. Treasuries
• Rate hike triggers:
• Yen carry trades unwind
• Funding costs spike
• Bonds wobble
• Risk assets reprice fast
⚠️ Bottom line:
Markets haven’t fully priced this yet.
Tightening in a fragile system = fast, global reactions.
🔍 Watch closely: JPY, funding markets, bonds. This is where the first warning lights flash.