🚨FEAR ALERT: JAPAN IS BACK IN PLAY
Japan is on the verge of another rate hike, and markets are starting to pay attention.
For years, Japan was the backbone of cheap global liquidity. Ultra-low rates turned the yen into funding fuel for risk assets — stocks, crypto, everything. That era is slowly ending.
Economists are warning that tighter policy from the Bank of Japan could trigger a sharp risk-off move. Some are even floating scenarios where Bitcoin revisits the $63,000 zone if liquidity unwinds aggressively.
This fear isn’t coming from nowhere.
The last time Japan meaningfully tightened policy, global markets felt it fast. Yen carry trades were unwound, liquidity dried up, and Bitcoin saw a violent drop. Not because BTC was weak — but because leverage disappeared overnight.
Now the setup feels familiar.
Inflation in Japan has stayed above target longer than expected. Wage growth is picking up. The BOJ has already moved away from negative rates, and forward guidance suggests more normalization ahead. Even a small hike matters when markets are built on leverage.
If Japanese yields rise further, capital that once flowed into risk assets may rush back home. That strengthens the yen, pressures global liquidity, and puts speculative assets like crypto under stress.
Does this guarantee a crash? No.
But it does raise volatility risk.
This is why traders are on edge. Japan doesn’t need to shock markets — it just needs to keep tightening slowly. That alone can force position unwinds.
History doesn’t repeat perfectly, but it often rhymes.
And Japan tightening has never been friendly to leveraged markets.
