Japan's core inflation has surged to 3%. The 2% red line set by the Central Bank? It's already been breached.

So the market is now guessing—whether this is the Central Bank of Japan taking preemptive measures to prepare for another interest rate hike. As soon as the news broke, global capital markets immediately tightened. Yesterday, the Asia-Pacific market collectively plunged, and U.S. stocks couldn't withstand it, following suit.

The question is: how big of a storm will this interest rate hike stir up?

Looking back at the old accounts, do you remember the operation on July 31 last year? The Bank of Japan suddenly intervened, directly raising the interest rate from 0.1% to 0.25%. At that time, almost no one believed they would dare to act. What was the result? The global market experienced a "Black Friday"—the US stock market, European stock market, and Asia-Pacific stock markets all plummeted, and the Nikkei index even triggered a circuit breaker.

There is a key logic behind this: the yen has long been the world's cheapest "funding currency." Investors like to engage in carry trades—borrowing yen at low cost and then investing in U.S. stocks, U.S. bonds, or even stock markets in various Asian countries to profit from the price differences.

But once the Bank of Japan raises interest rates, the rules of the game change. The rise in borrowing costs is one aspect, but the more critical issue is the appreciation of the yen, which means needing to pay back more in real cash. Investors see that something is wrong and quickly retreat—global funds flow back to Japan, and various assets follow suit and collapse.

Will the last financial panic be repeated this time? The market indeed has a "muscle memory," with cryptocurrencies, US stocks, and Japanese stock indices all trending downward. However, there's no need to panic too much,