Recently, a phenomenon has been widely discussed in the market: the Bank of Japan has finally initiated an interest rate hike cycle, raising rates from near zero to 0.75%. This figure seems moderate, but behind it lies a hidden undercurrent that is changing the global liquidity landscape.

The key issue lies in the scale of carry trades. Over the past decade, global institutions and capital have exploited the ultra-low cost of the Japanese yen, borrowing nearly $9 trillion and then investing it in high-yield assets worldwide—stocks, bonds, cryptocurrencies, and more. This money has become a vital force supporting the valuation of various risk assets.

But changes are now underway. As Japan raises interest rates, this "world's cheapest financing source" is closing. Once the Japan-U.S. interest rate differential continues to narrow, the $9 trillion of carry trade funds will face pressure to flow back. This is not an abrupt shock overnight but a long-term, slow yet persistent liquidity withdrawal.

More complex is Japan's own contradiction: the central bank raising rates to stabilize the exchange rate and prices, while the government simultaneously increases spending through massive supplementary budgets and plans to expand military expenditure in the future. The debt snowball is growing larger, leaving hidden risks for future policy adjustments.

In the short term, markets may react sluggishly, but this clue is worth monitoring. When the underlying variable of global liquidity begins to change, whether in traditional finance or crypto markets, valuation logic will quietly shift. Capital flows are the key to understanding the true pulse of the market.