boj

According to Bank of America, the Bank of Japan is expected to raise policy rates toward 1.00% as soon as April. That level has not been seen since the mid 1990s.
Many traders ignore Japan in macro positioning. That can be a costly mistake.
Japan has been one of the world’s biggest cheap funding hubs for decades. Ultra low yen rates powered global carry trades where capital borrowed in yen flowed into higher yielding assets worldwide.
When Japan tightens, that flow can reverse. And reversals are rarely smooth.
Why this matters for markets:
• Yen funded carry trades start to unwind
• Global liquidity conditions tighten
• Bond market demand can shift quickly
• Volatility rises across risk assets
Historical signal traders should remember:
In 1994, global bonds suffered a massive selloff often called the Great Bond Massacre. Roughly 1.5 trillion dollars in value was erased worldwide.
In 1995, dollar yen dropped toward 79.75 as stress accelerated. Later that same year, Japan was forced to reverse course and cut rates again. Tightening into fragility did not hold.
Today’s added risk layer:
Japan is one of the largest foreign holders of US Treasuries, near 1.2 trillion dollars. If Japanese domestic yields rise:
• Capital has incentive to return home
• US bond demand mix changes
• Funding costs reset higher
• Cross asset repricing can spread fast
This is not panic talk. This is liquidity awareness.
When a structural cheap money anchor starts lifting rates, markets usually feel it. Watch yen strength, bond yields, and carry trade proxies closely.
Position smart. Liquidity shifts create opportunity and risk at the same time.
#Japan #BOJ #InterestRates #Liquidity #Macro
@Maliyexys $XRP