🚨 JAPAN HAS JUST SET OFF A TRIGGER — GLOBAL MARKETS ON A 48-HOUR TIMELINE.
Japan is taking steps that many deemed unlikely.
The Bank of Japan has increased interest rates again, pushing government bond yields into a realm the current financial system has rarely encountered.
This situation isn’t confined to Japan alone.
It’s a stress test for the entire globe.
For many years, Japan relied on nearly zero interest rates to sustain its financial system. That phase is coming to an end — and when it does, the resulting figures may be severe.
🔸What caused this rapid escalation?
Japan has around $10 trillion in liabilities, and this amount continues to rise.
Increased yields result in:
Soaring debt service expenses
Interest-consuming tax revenues
Vanishing fiscal capacity
No significant economy shares such a straightforward scenario:
Default
Debt restructuring
Or inflation
And Japan will not experience its collapse in isolation.
🔸The global aftershocks that many overlook.
Japan possesses substantial foreign investments:
More than $1 trillion in U. S. Treasury securities
Hundreds of billions in international stocks and bonds
Those assets functioned effectively when Japanese yields were near zero.
Now, domestic bonds finally provide genuine returns.
After accounting for currency hedging, U. S. Treasuries may result in losses for Japanese investors.
This isn’t a matter of opinion — it’s arithmetic.
Funds will flow back home.
Even a slight return of capital won’t be “smooth. ” It diminishes global liquidity.
🔸The true explosive factor: the yen carry trade.
Over $1 trillion was borrowed at low yen rates and funneled into:
Equities
Cryptocurrency
Developing markets
As Japanese interest rates climb and the yen appreciates:
Carry trades will start to unravel
Margin calls will hasten
Forced sell-offs will commence
Correlations will align completely.
Everything will be sold — simultaneously.
🔸At the same time…
The yield differences between the U. S. and Japan are diminishing.
Japan has diminished motivation to support U. S. deficits.
U. S. borrowing expenses will rise.
And if the Bank of Japan raises rates once more?
The yen will surge even more.
Carry trades will explode even quicker.
Risk assets will react immediately.
Japan can no longer merely print money to solve its issues.
Inflation is already high:
Printing → a weaker yen → increased import expenses → domestic pressures rise sharply.
This is not mere background noise.
It’s a fundamental transformation that the world has yet to account for.
$ENSO $SCRT $SENT
