This time, Japan is not just a "small interlude"; something serious has happened.

With 30-year and 40-year government bonds dropping 25 basis points in a day, in Japan, this market is essentially out of control. The root cause is simple: a statement from Kato Saemae saying, "End fiscal tightening, reduce taxes and increase spending," immediately made the market realize one thing—Japanese bonds may become even less valuable.

So the result is very direct:

Long bonds are hit → Hedge funds cut losses → Life insurers are forced to take over → Liquidity begins to tighten.

This is why traders say this is the "Japanese version of the Truss moment."

It is not surprising that the Japanese and South Korean stock markets opened lower.

The Japanese bond market is an important support point in the global interest rate system; when it shakes, U.S. bond yields are immediately driven higher, and naturally, risk assets in the Asia-Pacific region are reduced. It’s not about being bearish on Japan; it’s just that no one wants to take on risk when interest rates are unstable.

For the cryptocurrency market, the short-term outlook is not friendly.

There are three real problems in the current environment:

1. Long-term rates are rising

Bitcoin and Ethereum are most sensitive to interest rates; when rates rise, valuations are pressured.

2. Yen arbitrage funds are withdrawing

When Japan is in turmoil, low-cost funds pull back first, and risk positions are the first to be cut.

3. It’s not just a single-point issue

The U.S. has debt pressure, Japan is starting to loosen fiscal policy, and Europe is already weak.

What the market fears is "multiple issues arising for bulls simultaneously."