The two keywords for December 2025 are: Federal Reserve interest rate cuts and expectations of interest rate hikes by the Bank of Japan.
Particularly, the yen deserves more attention — historically, several interest rate hikes in Japan have been accompanied by a global repricing of funds, leading to significant asset fluctuations. For example, after the interest rate hike in July 2024, the U.S. stock market and the cryptocurrency market experienced a short-term correction.
The reason is that the yen has maintained low interest rates for a long time, resulting in a massive carry trade globally. Once expectations change, cross-market funds may adjust their positions.
In such a macro environment, it is advisable to maintain flexible positions, focus on short-term trades, participate lightly in major currencies, and avoid heavy positions chasing highs.
Monitoring policy rhythm is more important than price.
