It looks like the market is about to face a real test. The statement from the Bank of Japan today is quite clear—interest rate hikes will come as long as economic data meets expectations. Prices in Japan are still rising, and inflation numbers are nearing 2%. With this statement, the market will basically take it as a signal of a sudden shift to a tough stance.

The initial intention of Japan to raise interest rates is to stabilize inflation and exchange rates, which is understandable. However, in the short term, global liquidity may tighten, and asset prices are likely to experience a wave of fluctuations. Especially in areas that have been supported by low-cost funds—such as the crypto market and stock market—may be the first to be impacted.

Such macro-level changes will impact the pricing logic of all risk assets. During the next period, it is still necessary to pay close attention to market trends.