Bank of Japan Governor Ueda Kazuo sent a strong signal during Christmas, officially announcing the end of the nearly thirty-year era of zero and negative interest rates. His logic is straightforward: the spiral rise of wages and prices has already formed, real interest rates are too low, and continuous rate hikes are an inevitable choice with no other options.

This shift represents a nuclear-level shock to global markets. As the cornerstone of international arbitrage trading—the "cash cow" machine that borrows near-zero-cost yen to invest in high-yield assets worldwide—has now come to a halt. Over the past thirty years, countless hedge funds and investment institutions built trading systems based on this cheap yen, which now face structural disintegration. Related positions on Wall Street are being forced to close, and global capital is beginning to flow in the opposite direction, with pressure evident.

Market focus has shifted from "whether to raise interest rates" to "how much and how quickly." The BOJ's statement indicates that this is not a one-time test but the true start of a sustained tightening cycle. Global capital must reassess the role of Japanese assets—shifting from a source of cheap funds to a destination that needs revaluation due to normalizing interest rates.

Looking ahead, market volatility will be closely tied to the BOJ's data reviews and interest rate signals. How will this thirty-year delayed monetary policy shift reshape the global asset landscape? Which markets will be hit first by the capital reflow? The answers to these questions may gradually emerge over the next few quarters.