The Bank of Japan has raised interest rates to 1% for the first time since 1995.

For many years, investors borrowed almost at zero cost and used this money to buy stocks, cryptocurrencies, and bonds.
This cheap money fueled the markets, but now that faucet is being turned off.
In 2024, a similar increase caused Bitcoin to drop from $65,000 to $50,000.
But this time, things are more complicated.
Factors like the potential easing of US-Iran tensions and Fed interest rate decisions will also affect liquidity.
Everyone says "Carry Trade is over," but it's not that simple.
Interest rates in the US and Europe are still higher than Japan's, so borrowing in yen and investing in high-yield assets remains attractive.
However, in the past, only the interest rate differential was considered; now, the risk of yen appreciation must also be taken into account.
In short, the Carry Trade hasn't died, but it's no longer as easy and risk-free as before.
Investors need to be more cautious and consider exchange rate risks.