Revisiting the Yen Interest Rate Hike Crisis is Just Fooling Around!!!

❤️‍🔥Japan's Economic Outlook: Three Major Risks to Watch in the Future❤️‍🔥

Yesterday, #加密 "consciously" slimmed down, #美股 slightly lower than the previous day, based on the decline in the Asian time zone and the U.S. being in a less active trading period from Thanksgiving to Christmas, the market should be viewed objectively. Combining the current situation, this article is supplemented with key points to focus on.

Current Situation:
Although the impact of carry trading may be milder than in August 2024, the market may still underestimate or overestimate the effects. Instead of panicking and guessing, it is better to focus on three key points.

Three Key Points to Focus On:
📌 Whether Japan's core-core inflation data exceeds expectations upward.
📌 The difference in policy rhythm between the Bank of Japan and the Federal Reserve, especially the scenario where the Bank of Japan raises interest rates ahead of schedule and the Federal Reserve delays rate cuts.
📌 The sustainability of the divergence between the yen exchange rate and the Japan-U.S. interest rate differential, as well as potential trigger events for a sudden increase in volatility.

👉 Japan's Core-Core Inflation Exceeds Expectations Upward

With the aggressive fiscal policy implemented by the high government, the depreciation of the yen and rising inflation pressure may lead to core inflation data exceeding expectations upward. If core inflation continues to rise, the Bank of Japan may have to raise interest rates ahead of schedule to respond to inflationary pressures, further increasing the volatility of the yen exchange rate.

👉 The Difference in Policy Rhythm Between the Bank of Japan and the Federal Reserve

The script is that there is a 10-day time difference between the U.S. and Japanese interest rate policies, which is a sequential relationship. Given the lack of market confidence and its fragility, whether there will be a scenario where the Bank of Japan raises interest rates ahead of schedule and the Federal Reserve delays rate cuts. (Prepare plans, respect data, and there is no need to worry unnecessarily)

👉 Divergence in Japan-U.S. Interest Rate Differential and Sudden Increase in Volatility

Although the Japan-U.S. interest rate differential has narrowed from 3.7% at the beginning of the year to 2.5%, it is still at a historically high level. Whether the yen-related volatility index (such as the 3-month implied volatility) will deviate from the current low range, especially as policy uncertainty increases.

#日央行加息 #日元汇率 #套息交易