Today in Asia is quite interesting - the stock market and the crypto world are both plummeting, Bitcoin, Nikkei 225, and KOSPI are all struggling.

The culprit? The market is betting on whether the Bank of Japan will take action to raise interest rates.

Recently, the Governor of the Bank of Japan, Kazuo Ueda, hinted that if the economic data is good enough, a rate hike is not out of the question. Currently, the market is betting on a 48% chance of a 25 basis point increase and a 51% chance of maintaining the status quo—essentially a fifty-fifty situation. Even more exciting is that the yield on 10-year Japanese government bonds has already surged to 1.80%, just a step away from historical highs.

Why is this matter so sensitive? Because Japan has long maintained ultra-low interest rates, which effectively provides a "cheap funding pool" for all of Asia. Many institutions rely on this for arbitrage—borrowing low-interest loans in yen and then investing in high-yield assets (such as crypto currencies, emerging market stocks). Now, once interest rates rise, the cost of borrowing will directly increase, making this game unplayable. As funds are withdrawn, panic naturally arises.

Interestingly, from the on-chain data and chip distribution of Bitcoin, investors are not panicking to the extent of wanting to run away; at least, there are no signs of panic selling for the time being.

By the way, a rumor surfaced yesterday - saying that Federal Reserve Chairman Powell will resign on December 1.

I think this matter is probably fake. This news first came from a certain overseas social media influencer, but mainstream American financial media and the Federal Reserve's official website have not responded at all. A position of this level, like the Chairman of the Federal Reserve, requires a complete set of procedures to resign: Senate nomination, hearing, voting, and even in the best case, it takes two to three weeks. Even if Powell really wants to leave, it can't be so sudden.

So don't get swayed by the hype; focusing on real data and policy signals is more reliable than chasing after the excitement.

BTC-6.71%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

7 Likes

Reward
7
4
Repost
Share

Comment

0/400

CompoundPersonality

· 11h ago

The interest rate hike in Japan is really coming, and the arbitrage game is about to end. --- It's a 50/50 gamble, and the market seems to be panicking a bit early this time. --- The news about Powell resigning is just some celebrity spreading rumors, it's really annoying. --- The capital pool is about to dry up, no wonder the crypto world is following suit. --- On-chain data is still stable, indicating that institutions aren't truly panicking; this time it might not lead to dumping. --- A single statement from the Central Bank of Japan could topple half of Asia, that's really ruthless. --- Instead of listening to rumors, it's better to look at the data; one should have this awareness. --- Once the arbitrage model breaks, this round of falls has just begun.

View OriginalReply0

WinterWarmthCat