⚡️ Beware of Japan! If the US stock bull market ends, it may not be the Fed that strikes first, but Japan—

Let's look at two very contradictory news items: 1) Japan's 10-year government bond yield at 2.88%, a new high since 1996. 2) USD/JPY at 162.8, a new low since 1986.

This is a very dangerous signal: normally, when bond yields rise, yen asset returns increase and the yen appreciates. But now the situation is completely the opposite — the yen continues to be sold! According to data from The Japan Times, short yen positions have reached the highest in 9 years.

Therefore, the bond market, forex market, and carry trade capital are all pushing the Bank of Japan to continue raising interest rates.

Once Japan raises rates sharply or even signals such an intention, the August 2024 incident serves as a precedent — when carry trade unwinding combined with weakening US employment caused BTC to plummet 18%.