Bottom line 🧭

Japan’s shift from the world’s cheapest funding source to a net seller of assets is a genuine regime change. With USD/JPY hovering near 156 (well above the 150 and 145 “trip-wire” levels), leverage that was once juiced by ¥-carry is now at risk of unravelling. Expect tighter global liquidity, higher funding costs, and a volatility spike across risk assets—especially crypto and high-beta equities—into and after the 19 Dec BOJ meeting.1. What’s really changing?BOJ action Why it matters Market plumbing impact+50 bp cumulative hikes in 2024-25; probability of another hike to 0.75 % on 19 Dec ≈ 90 % Yen funding cost is no longer ~0 % Unwinds classic ¥-carry trades in tech, bonds, cryptoGradual ETF liquidation: ¥330 bn/yr (~$2.3 bn) ⇒ 100-yr draw-down plan 2 First central-bank QT of equities ever Structural seller replaces implicit “BOJ put”Record 10-yr JGB yield near 1.96 % Higher local real rates Pulls money back on-shore, pressures USD fundingKey takeaway: liquidity that once flowed from Japan into global risk assets will now be repatriated, and positions built on that liquidity must be resized.2. Stress levels to watchPreview CodeJan 2025Apr 2025Jul 2025Oct 2025145150155160USDJPY 2025DateUSD per JPY150145The pair is already >150, the margin-call threshold many prime brokers flag.A quick break of 145 would force CTA/systematic deleveraging and could cascade through crypto, EM FX, and high-beta equities.3. Asset-class check-listAsset Near-term bias RationaleUSD/JPY Lower (preferred expression: staggered put spreads) Positioning still net-short yen; higher JGB yields + BOJ QT favour yen strength.Bitcoin & high-beta crypto Downside risk −20 % to −30 % (historical post-hike pattern) Each 2024-25 hike preceded 23-31 % BTC drawdowns; leverage sensitive to USD/JPY moves.Gold bullion Mixed in USD, stronger in JPY USD rally off risk-off could cap $-gold, but yen appreciation boosts ¥-gold; still a hedge if liquidity crunch spreads.Gold miners (e.g., IAUX peers) Short-term volatility, long-term opportunity Funding squeeze can hurt near-term, but higher real rates eventually cool inflation and lift real yields—select quality names with low debt.Japanese equities (hedged) Growing headwind BOJ is methodical but is now a seller, removing a structural bid.4. Practical playbook 📒Scale back leveraged crypto longs or add protection; look at 1-month BTC put spreads targeting the -25 % zone.Add yen longs via options or micro futures; size so a move to 145 gives a 3-5 × payoff.Keep gold exposure but upgrade quality: favor liquid bullion/GLD or low-cost producers with insider alignment (your IAUX screen is on point).Raise cash & shorten duration in bond holdings; BOJ’s Treasury selling could nudge UST yields higher.Set automated alerts on USD/JPY 150 and 145 to act fast if cascades begin (happy to create them for you).What would help me refine these ideas for your portfolio?🔍 Which positions (size and timeframe) are you most concerned about going into the BOJ meeting—crypto, equities, or currency?2: Bloomberg, “BOJ Is Said to Start Selling ETF Holdings as Soon as January,” 15 Dec 2025 (ID 2)#etf #JapanCrypto