Yen interest rate hike!!! US dollar interest rate cut!!!
🔥🔥🔥 Alarm sounded! The Bank of Japan is about to take action, and the true "great shock" to the global financial market may have just begun! Do you think the US dollar interest rate hike is the big deal? Wrong! Once the yen, which has been dormant for decades, "wakes up," its impact may far exceed your imagination.
💥 Why is the yen interest rate hike so terrifying?
The core lies in a financial term: "carry trade currency." For decades, Japan has been the global capital's "cheap funding pool." Due to the long-term maintenance of near-zero ultra-low interest rates, international investors (including large institutions) habitually borrow nearly costless yen, exchange it for high-yield currencies like the US dollar and euro, and invest globally in stocks, real estate, and other assets. This has formed a cross-border arbitrage trading volume of up to several trillion dollars.
💥 A double kill pattern is forming!
Now, the situation is reversing: on one hand, the Bank of Japan has begun to raise interest rates to respond to inflation, with recent plans to raise rates to around 0.75%. On the other hand, the market widely expects the Federal Reserve to soon enter a rate-cutting cycle. This combination of one hike and one cut means that the foundation of arbitrage trading is shaking.
Once Japan continues to raise interest rates while the US cuts rates, "borrowing yen to buy US dollar assets" will become unprofitable. A massive amount of funds will be forced to liquidate, that is, sell global assets and exchange them back for yen to repay debts. This may lead to two outcomes: first, the yen exchange rate will appreciate sharply, and second, the global asset market (such as US stocks) will face tremendous selling pressure. The impact of this funding "returning home" will be global.
💥 The Bank of Japan's "tightrope"
However, the Bank of Japan is also walking a tightrope. A significant interest rate hike would immediately increase the government's enormous debt burden and suppress the fragile domestic economy.
🎯 In conclusion, a global capital migration dominated by the yen is already surging beneath the surface. This is not only a matter between Japan and the US, but also the "Sword of Damocles" hanging over all markets that rely on foreign capital. Do you think the Bank of Japan has the courage to spark this storm? Share your thoughts in the comments! 👇#美联储降息 #加密市场观察
