For more than three decades, Japan supplied the world with the cheapest money ever created.
Near-zero interest rates. Endless liquidity. Trillions of yen borrowed and injected into global markets—stocks, bonds, real estate, crypto, pensions, everything.
That system just broke.
The overlooked facts
Bank of Japan ETF holdings: ~$534B
Recently announced unwind timeline: 100+ years
Probability of a December 19 rate hike: ~90%
Policy rate: 0.75% — highest level since 1995
Japan’s U.S. Treasury holdings: $1.189T (largest foreign holder)
10-year JGB yield: 1.96% — highest since 2007
30- & 40-year yields: Record highs
The pattern no one wants to talk about
March 2024 BOJ hike: Bitcoin −23%
July 2024 BOJ hike: Bitcoin −26%
January 2025 BOJ hike: Bitcoin −31%
Another decision date is approaching: December 19.
What fundamentally changed
The Bank of Japan is no longer a buyer.
It is now a seller.
For the first time ever, a major central bank is actively reducing assets accumulated through quantitative easing—not tapering, but reversing.
Why this matters globally
The yen carry trade quietly financed modern markets.
Cheap yen funded:
Tech stocks
Sovereign and corporate bonds
Crypto markets
Pension portfolios
Leveraged risk across the system
That funding cost just jumped to 0.75%—and it’s still climbing.
A true regime shift
Markets anticipated a rate hike.
They did not price in what comes next.
A permanent buyer turning into a permanent seller rewrites risk models everywhere. Liquidity assumptions built over 30 years no longer apply.
Levels that matter
USD/JPY below 150: Margin stress begins
USD/JPY below 145: Forced liquidations accelerate
Mark the date
December 19, 2025.
The start of a century-long unwinding of Japan’s invisible financial empire.
Position accordingly.
