On December 19, this interest rate hike has little impact
First, the conclusion: this 0.25% is basically a 'priced event', and the direct shock to the market is limited.
The reason is simple: the market has already anticipated this.
Essentially, it is all preparing for Japan's formal farewell to the era of negative interest rates.
This time is not an 'unexpected interest rate hike', but rather a policy that has been repeatedly hinted at and gradually guided into place.
What can truly shock the market is always 'beyond expectations', not 'official confirmation'.
Therefore, this interest rate hike itself is more like a shoe dropping than a heavy blow to the market.
The real suspense: is this a 'one-time adjustment' or the 'starting point of an interest rate hike cycle'?
This is what the market is truly focused on.
If it is a one-time rate hike (dovish)
If the Bank of Japan releases any of the following signals after the meeting: 'Future decisions will depend on data'
'Inflation still has uncertainties'
'Not in a hurry to continue raising rates'
Then the market's interpretation will be: this is a technical adjustment of long-term negative interest rates, rather than the beginning of a tightening cycle.
In this case: the yen may rise and then fall in the short term, and global liquidity pressure is limited.
The impact on U.S. stocks and crypto assets is relatively neutral.
If it hints at 'further space ahead' (hawkish) — this is the risk point.
Once similar statements appear: 'Inflation is sticky' 'Policy remains loose' 'Further normalization is necessary'
Last night, 'two spikes + decline', was it triggered by Japan's interest rate hike?
It’s not the direct cause, but a result along the same logic line.
Last night's trend is essentially a combination of three factors: position cleaning before macro events.
Large funds do not like to 'bare' themselves before major central bank meetings; spikes are essentially about de-leveraging and triggering stop-losses.
The strengthening of the yen → Arbitrage trading begins to loosen; the yen is one of the world's most important funding currencies. Once it continues to strengthen, the 'hidden leverage' of risk assets will be compressed.
Technically, it enters a sensitive zone, near key pressure/support levels, making it easier for the market to complete a turnover with extreme volatility.
So what you see is not a 'one-sided crash', but a cut on both sides, then a choice of direction.
