To The Moon

BoJ’s Hawk Mode Activated: Markets Brace for Impact 🚨🦅

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For the past 30 years, Japan has basically been the world’s biggest “cheap money vending machine.”

Super-low interest rates + a super-weak yen = heaven for global investors.

Everyone borrowed yen, added leverage, and went shopping for U.S. Treasuries, tech stocks, and even emerging-market goodies.

But now… the whole setup is quietly shifting.

The yield gap between U.S. 10-year Treasuries and Japan’s 10-year bonds is shrinking fast.

Why is this a little scary?

Because when Japanese bond yields climb, Japan’s big players — insurance companies, pension funds, mega-institutions — will start going:

“Hmm… maybe I should bring my money home.”

Which means:

1. Selling U.S. Treasuries → Buying Japanese bonds

2. U.S. Treasury yields rising → U.S. stocks feeling the pressure

And don’t forget — Japan is the largest foreign holder of U.S. Treasuries.

If they start shifting money, the whole global market can wobble.

So here comes the big question:

If Japanese yields already jumped, why hasn’t the U.S. stock market crashed?

Easy.

Because the yen is still lying flat on the floor, super weak, hiding the impact of rising Japanese yields.

In other words, everyone is just waiting for the final boss — the Bank of Japan.

If the BoJ decides to raise rates, the yen could rocket upward.

And then… the famous carry trade finally explodes.

And honestly? The signs are getting louder:

1. Many economists think the Dec 18–19 meeting might include a real rate hike.

2. Two members on the 9-person board are already pushing to move rates from 0.5% → 0.75%.

3. Governor Ueda has openly said they’re discussing “whether and when to hike.”

If they actually pull the trigger:

1. Yen shoots up → USD funding cost rises

2. Japanese money flows back → U.S. Treasuries get dumped → U.S. stocks feel the squeeze

That’s the moment markets should truly say,

“Uh-oh.”

Right now?

This calm feeling is just the peace before the storm.

While most people only care about “Will it go up tomorrow??”,

Lanxi is always watching the bigger game — the structure, the cycles, and the reflexive loops.

We’ve been waving the warning flag about carry trades since November 22!

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