The Bank of Japan will hold a monetary policy meeting today and tomorrow, with results coming out on the 19th! Personally, I believe there is a very high probability of an interest rate hike, which is the core bearish factor suppressing risk assets recently! Last night, part of this was already digested, and with a wave of CPI at 9:30 tonight! The recent market will become very exciting!

Let’s talk about the core logic of two news items:

Monetary Policy Meeting: In the past, many institutions "borrowed cheap yen to buy other assets with higher returns in dollars; now that Japan is raising interest rates, borrowing costs are rising, and the yen will appreciate, making this trade unprofitable — institutions will rush to sell off other assets and convert back to yen to repay loans!

CPI: This looks at whether prices are rising; low inflation = higher likelihood of the Federal Reserve cutting rates in January → the dollar becomes less valuable → funds will flow to buy other assets with higher returns; high inflation = the Federal Reserve may not cut rates → funds will be withdrawn from other assets to buy dollars!

If I must give operational advice, it would be four words: short on rallies~