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KZG Crypto 口罩哥
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Japan's Central Bank Interest Rate Hike on the Horizon, But Panic is Overestimated
The BOJ meeting on December 18-19, with the market pricing in a 90% probability of a 25bp hike to 0.75%, the highest rate in 30 years. The rate hike in August caused BTC to plummet from $65K to $49K, and the market still remembers.
But this time the situation is different. Several key variables:
First, the market has fully anticipated this. The yield on Japan's 2-year government bonds has reached 1%, the highest since 2008, which means the bond market has long priced this in. Second, speculators have established a large net long position in the yen—Bob Elliott is right that the yen carry trade has actually been cleaned out in October. Third, this interest rate hike is a "gradual normalization," not a policy shift.
But this time the situation is different. Several key variables:
First, the market has fully anticipated this. The yield on Japan's 2-year government bonds has reached 1%, the highest since 2008, which means the bond market has long priced this in. Second, speculators have established a large net long position in the yen—Bob Elliott is right that the yen carry trade has actually been cleaned out in October. Third, this interest rate hike is a "gradual normalization," not a policy shift.