2025-12-26 13:21:22

Thirty years of repression finally unleashed. The Bank of Japan officially announced the end of its negative interest rate policy last night, with Governor Ueda Haruhiko making it clear: wages are rising, prices are soaring, and the era of free yen is over. Next year, interest rate hikes will continue.

How significant is this shift? Global arbitrage trading was caught off guard. Funds that have relied on yen arbitrage for a long time are recalculating costs, and Japanese assets are no longer the "cheap trash can" they once were. From stocks to bonds to the crypto market, all are re-pricing in response to this policy adjustment.

Thirty years of waiting have led to a turnaround, but the real volatility has just begun. When will the next rate hike window open? How intense will market reactions be? What does this mean for your holdings?

ETH-1,31%

BNB-0,01%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

6 Likes

Reward
6
4
Repost
Share

Comment

0/400

LiquidatorFlash

· 22h ago

Japanese arbitrage has collapsed... How much do the guys holding carry trade positions need to liquidate today?

View OriginalReply0

MindsetExpander

· 22h ago

The Bank of Japan's move directly broke the entire market's comfort zone, and the arbitrage game is completely over. People haven't even reacted yet, and the yen has already started to turn around and sing its song. Now, everyone holding positions needs to recalculate, no one can escape this wave of re-pricing. The days of free arbitrage are gone forever; next, it depends on who can hold on to the bottom. The 30-year pattern has suddenly changed, which is indeed a bit shocking. With such strong rate hike expectations, short-term volatility is definitely unavoidable. The yen is no longer cheap, funds need to find new places to go; will cryptocurrencies be impacted? A rare turning point in human history—should we enter now or wait and see? Getting anxious, the market is anxious, and I’m a bit anxious too haha. If interest rate hikes continue next year, this round of adjustment might not be over yet.

View OriginalReply0

rekt_but_resilient

· 22h ago

Japan's 30-year awakening, arbitrage traders should cry now, this time holding positions depends on fate

View OriginalReply0

DeFiChef

· 23h ago

This move in Japan directly hit the arbitrage trading's lifeline. I calculated that the holding cost instantly skyrocketed, no wonder the crypto market was so volatile last night.

View OriginalReply0