The Bank of Japan has truly changed this time.

According to meeting minutes, they will continue to raise interest rates after December. The 0.75% rate level is already the highest in nearly thirty years, but central bank officials' attitude is very clear — it’s still far from enough. This central bank, which has been passive for thirty years, has suddenly become assertive, driven by four forces:

First, inflation has exceeded the 2% target for nearly four consecutive years, yet real interest rates remain negative. It sounds contradictory, but that’s the reality — Japan’s purchasing power is silently eroding. Second, the yen has been depreciating long-term, and prices simply won’t come down; some officials within the central bank have openly advocated for frequent rate hikes. Third, the era of negative interest rates is over; international capital that was arbitraging in Japan has been rushing to withdraw in recent days, causing turbulence in Japanese stocks, bonds, and forex markets. Fourth, the central bank’s roadmap has already been laid out, with current rates still some distance from the neutral level, and rate hikes only halfway through.

A chain reaction has already been triggered. Yen volatility has soared, depreciation expectations remain high, and hard assets like gold and silver are showing their value amid panic. The bigger issue is that global liquidity is facing contraction — it’s no longer just a major trading institution tightening alone; now the Bank of Japan has officially entered the scene.

The seriousness of this matter is that it far exceeds Japan’s borders. If Japan continues to raise interest rates, trillion-scale carry trades could collapse, putting pressure on the dollar, US bonds, and emerging markets. Some are already seeing warning signals flashing; others are contemplating how to seize opportunities amid the volatility. Every risk has its other side — often, that’s where profits lie.