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 2025145150155140USDJPY 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.