Will the yen interest rate hike cause a financial storm? I reviewed historical data three times and found the truth isn't so scary.

Yesterday, while having tea with an older brother in the circle, he suddenly slammed the table: "The yen is going to raise interest rates, and the global market is going to change!"

I was taken aback and spent the night reviewing nearly 20 years of interest rate hike records, only to realize that it's not that simple—

The yen, this "big water tank," has held a zero interest rate for over 20 years.

Global speculators love to do one thing: borrow cheap yen to buy U.S. Treasuries, U.S. stocks, and cryptocurrencies to make a profit; this is "carry trade," with a whopping $30 trillion involved, equivalent to spreading yen around everywhere.

Now Japan suddenly wants to raise interest rates, not to stir up trouble, but because it really can't hold on anymore:

Milk in supermarkets has increased in price twice in six months, the yen has fallen to a 30-year low against the dollar, and imported oil and food prices are ridiculously high. If they don't raise interest rates to stabilize the exchange rate, the common people's lives will be unbearable.

But raising interest rates is also a double-edged sword:

The Japanese government owes more debt than twice the annual GDP, and after the interest rate hike, it will have to pay back hundreds of billions just in interest;

Those small and medium-sized enterprises that survive on low-interest loans are even more worried and can't sleep.

The most critical point is that everyone is afraid that the $30 trillion in carry trade funds will "run away"—

Once funds withdraw from the stock market and cryptocurrency market, there will indeed be short-term fluctuations.

But I reviewed the records of the last three interest rate hikes and found that after a few days of panic, the market returned to calm:

Because the Federal Reserve is still lowering interest rates, the interest rate differential between the U.S. and Japan won't be closed quickly, and capital won't be foolish enough to withdraw immediately.

The older brother sighed after hearing this: "So it's not a storm, but a light rain."

Indeed, the economy has never been black and white.

Rather than being scared into making reckless trades and cutting losses by headlines of "collapse" and "crisis," it's better to understand the underlying logic—

Do you think this time the yen interest rate hike will affect your holdings? Let's discuss in the comments section~