#数字货币市场洞察 Rare global central bank policy hedging in December—worth keeping a close eye on!

To put it bluntly: The disruptive impact of Japan’s potential rate hike could completely offset the benefits of a US rate cut.

Let’s start with the US—at the December 10th FOMC meeting, over 85% of the market expects a rate cut. The FedWatch tool data is clear, and liquidity easing would typically be a positive thing.

But the issue is with Japan: The Bank of Japan’s meeting on the 19th will very likely result in a rate hike. The governor’s recent statements have paved the way, and the signals are clear enough. If a rate hike is implemented, yen carry trades will be quickly unwound, with large amounts of capital flowing back into the Japanese market—putting pressure on global risk assets.

Right now, it’s a game of tug-of-war:
The liquidity released by a Fed rate cut could be offset by funds pulled back due to a BOJ rate hike—and the latter often hits harder.

Once the BOJ’s decision is announced on the 19th, there’s a good chance of continued short-term market adjustments. It’s best to watch and wait for a clearer direction before making moves.

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