Bank of Japan Interest Rate Hike Countdown: The Crypto Market May Face a Key Test
On December 19, the Bank of Japan will hold a crucial meeting. Governor Kazuo Ueda has clearly stated that the possibility of an interest rate hike will be assessed, and the market pricing shows that the probability of a hike has exceeded 80%. The mainstream expectation is to raise by 25 basis points to 0.75%. If inflation continues to rise, more aggressive options cannot be ruled out.
The real risk lies in "yen carry trades." For many years, low-cost yen has been borrowed in large amounts, flowing into U.S. stocks and crypto assets. Once the interest rate hike is confirmed, arbitrage funds will flow back, and deleveraging pressure will simultaneously impact the risk market. Historically, similar situations have led to severe volatility, but unlike before, the current market has a relatively full expectation, and the overall leverage level is also significantly lower than during peak periods.
In the short term, high liquidity assets such as $ETH , $BNB , and $SOL still need to guard against amplified volatility. Aggressive operations are not advisable before the meeting; a more prudent approach is to control positions, reduce leverage, and maintain liquidity. Only after the policy decisions are made will the market direction become truly clear.
