You may not have noticed yet, but the biggest undercurrent in the market recently isn't the Fed's rate cut expectations—it's that the Bank of Japan is about to seriously raise interest rates.

Doesn't sound like a big deal? That's a huge mistake. Keep in mind, Japan has maintained zero interest rates for almost thirty years. Once they shift, the entire global asset pricing system will be shaken.

Why is a rate hike a must? Three reasons are right on the table:
First, inflation is truly out of control—core CPI has stayed above 2% for eight consecutive months. The "eternal deflation" era in Japan is completely over. Second, the yen has depreciated by a staggering 45% in the past two years, sending import costs soaring—forcing the central bank to stabilize the currency. Finally, wages: labor unions are directly demanding a 5% pay raise. Will companies follow? If they do, the inflationary spiral will take shape.

Simply put, this is a continuation of Japan's gradual exit from super-quantitative easing. But the problem is, the timing is incredibly sensitive—the Fed is preparing to cut rates, while Japan is moving in the opposite direction with a hike. This is the global market’s worst fear: the massive $4-5 trillion yen carry trade faces the risk of unraveling.

If funds flow back to Japan, a chain reaction will follow: US Treasuries will be sold off, the dollar may spike in the short term, the yen will rebound strongly, and there will be turbulence across stocks, bonds, and forex markets.

What about gold? It might be dragged down in the short term, but the medium- to long-term logic is actually even stronger—the expectation for a weaker dollar hasn't changed, real interest rates are still trending lower, and heightened geopolitical risk keeps safe-haven demand strong. These three pillars remain solid.

This isn't just simple volatility—it's a restructuring of the global capital chain. In the short term, we’ll have to weather the turbulence, but historical experience tells us that after the storm, opportunities often lie in assets that were unfairly beaten down. That’s true for gold, and possibly for certain undervalued crypto assets as well.

Recently, assets like ETH, ZEC, and LUNC have seen noticeably higher volatility, and the macro changes behind this shouldn't be ignored.