After 37 years, the Bank of Japan has finally taken serious action. The "Yen withdrawal machine" that allows global traders to profit through arbitrage has officially announced its shutdown.

Ueda's Christmas gift nobody wants—an announcement of continued rate hikes next year. Even more aggressive is the supporting operation: raising interest rates while injecting 122 trillion yen into the market. This kind of dual approach has completely confused the market. Last week, they were saying "let's observe a bit more," and this week, they turned around 180 degrees, firmly telling you: this inflation is for real.

Just looking at a few data points makes it clear how big the impact is: a negative interest rate cycle lasting 37 years (the longest monetary experiment in the world has come to an end); the current liquidity injection of 122 trillion yen, roughly equivalent to 7.6 trillion RMB; core inflation exceeding 2% for 22 consecutive months; the yen suddenly surged, and traders who made their fortune through yen arbitrage are collectively changing models and cursing.

There's a popular joke on Wall Street: "The zero-interest-rate king who has slept for most of his life suddenly stands up, and the first thing he does is draw his sword." The era of free capital has come to an end. Global capital is frantically vying for seats, and Japan's asset label as "the cheapest capital in the world" has been shattered. The next question becomes: when will the next rate hike come? When this zero-interest-rate ninja decides to strike, no one knows how fast the blade will be.

What does this mean for us? The narrowing of the US-Japan interest rate differential will trigger a massive migration of arbitrage capital worldwide; the pressure chain on Asian currencies will start to transmit; volatility will become the new normal.

Pay special attention to the cryptocurrency market—liquidity tightening of the yen has always been an amplifier of volatility. Assets like BTC and ETH may experience a new round of high volatility.

This is not the end, but the true beginning of a complex era. The three-decade-long monetary warm bed has cooled down, and the next question is: are you ready to adapt to the cold wind?