The Bank of Japan may raise interest rates by 25 basis points in December, and global markets face new changes

Background of Rate Hike

Japan's inflation has risen for 50 consecutive months, with core CPI remaining high, and the long-term depreciation of the yen exacerbates the risk of imported inflation. A Reuters survey shows that 90% of economists expect the Bank of Japan to raise interest rates by 25 basis points to 0.75% in December, potentially reaching 1% by the end of September next year, and the policy shift has become a market consensus.

Domestic Impact

Pros: Suppress inflation, stabilize the yen, alleviate import pressure, enhance purchasing power for imported goods. Cons: Increased financing costs for businesses may suppress investment and expansion; consumption may be restrained due to higher loan costs, dragging down economic recovery; the bond market may come under pressure from rate hikes, and short-term stock market volatility may increase, leading to long-term sector differentiation.

Global Impact

Monetary Policy Divergence: If the Federal Reserve cuts interest rates while Japan raises them, the divergence in policies may trigger a global bond market sell-off, especially in markets sensitive to yen carry trades. Capital Flows: A rate hike in Japan may attract international capital back, while some emerging markets may face pressure from capital outflows, exacerbating volatility in global financial markets.

Risk Warning

Japan's economy has already entered negative growth in the third quarter, and a rapid rate hike may exacerbate the risk of recession; the difficulty of policy coordination is increasing. While the market has partially digested expectations, short-term volatility is still difficult to avoid. Global investors should be wary of the chain reaction of yen appreciation, bond market fluctuations, and reversal of capital flows. #加密市场反弹

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