"Japan is going to raise interest rates on December 19, and a financial bomb is about to explode, leading to a massive withdrawal of arbitrage funds."

This left me a bit puzzled. I checked it out and found that this statement was only half true, but the panic was overly exaggerated.

Japan's interest rate hike this time is not a "sudden attack" at all. This is already the fourth interest rate increase in two years. They started raising the rate from -0.1% in 2024 all the way to the current 0.5%.

A slow process that has lasted for two years and was fully anticipated by the market cannot be called a "bomb," can it? The international arbitrage funds that are sensitive to interest rates have already adjusted their positions over the past two years and will not suddenly flee collectively when the fourth rate hike occurs.

Moreover, is a 0.5% interest rate really high? Compared to major economies, this level is still among the lowest globally. For arbitrage capital seeking high returns, the attractiveness is actually quite limited.

Some institutions estimate that even if there is a capital outflow due to this interest rate hike, the scale is probably around 20 trillion yen (about 13 billion USD). This number sounds large, but in the context of the global foreign exchange and financial markets where trillions of dollars flow daily, it's like throwing a small stone into a lake; how much wave can it create? It is far from being a systemic risk.

I'm not saying this matter has no impact at all. It will cause short-term fluctuations in the yen exchange rate, Japanese stocks, and some highly correlated assets. However, exaggerating it to the point of being a "financial bomb" that could collapse global markets is a bit detached from reality.

In this age of information overload, many scary-sounding messages can have most of the noise filtered out by spending a few minutes checking the timeline and looking at specific data. The biggest fear in investing is being led by this vague sense of panic and scaring oneself.

In summary: Japan's interest rate hike is old news, not news; it is a ripple, not a tsunami. Your trading plan should not be shaken by such an overinterpreted headline. #日本加息