Japan's interest rate hike is a medium- to long-term bearish signal for the US dollar, and for the global market, it is a dual impact of 'capital withdrawal + cooling risk appetite'. Today, we will analyze this seemingly niche but far-reaching policy trend from two dimensions: the movement of the US dollar and the pattern of global assets.
Let's first discuss the core issue: why does Japan's interest rate hike affect the nerves of the US dollar? Japan has long been a 'reservoir' of low-interest funds globally, and there has been a well-established arbitrage strategy: borrowing low-interest yen → converting to US dollars → allocating to US Treasury bonds, US stocks, and cryptocurrency assets, earning dual benefits from interest rate differentials and asset appreciation.
Once Japan starts raising interest rates, this arbitrage logic will be fundamentally shaken, directly triggering three chain reactions:
Arbitrage costs surge: the rise in yen borrowing rates means that the previously almost zero-cost financing advantage no longer exists, significantly compressing the profit margin of arbitrage trading.
Arbitrage positions concentrated in closing: the arbitrage funds that entered earlier will concentrate on closing positions, selling off their dollar assets to exchange for yen to repay loans.
Yen repatriation accelerates: domestic funds in Japan will reduce their allocation to overseas dollar assets and shift towards domestic assets with rising yields, further exacerbating the selling pressure on dollar assets.
Under the triple pressure, the US dollar index will face trending pressure. However, it should be clear that the current Federal Reserve interest rates are still significantly higher than those in Japan, and this bearish factor will not trigger a 'cliff-like collapse' of the dollar; rather, it will exert a medium to long-term suppressive effect, accompanied by fluctuations and shocks.
Having talked about the US dollar, let's look at the impact on global markets. The interest rate hike in Japan is essentially a 'withdrawal' of global liquidity; the large-scale retreat of arbitrage funds will directly amplify the volatility of various risk assets: first and foremost are the altcoins lacking fundamental support, and the speculative assets with high valuations. These types of targets often become the 'first choice for sell-offs' when funds withdraw, and the overall market sentiment will shift towards caution and conservatism.
A core reminder for retail traders: it is crucial to strictly control high-leverage operations and avoid altcoins that rely solely on FOMO sentiment for speculation, lacking performance and value support. Adopt a defensive posture to cope with market fluctuations, waiting for sentiment to stabilize and trends to clarify.
