The Bank of Japan will hold an interest rate meeting today and tomorrow, with the results announced on the 19th. A rate hike is highly likely, which is also the main reason for the recent weak performance in the crypto market. However, last night the market has already partially priced in this expectation, and tonight at 9:30 PM, the US will release the November CPI data. The upcoming market will definitely be very volatile, so watch out!

Let's talk about why these two events can influence the market:

1. The logic behind Japan's rate hike: Previously, many institutions and even ordinary investors liked to borrow cheap yen and convert it into dollars to buy stocks, cryptocurrencies, and other high-yield assets to profit from the spread. If Japan raises interest rates, firstly, borrowing costs will increase; secondly, the yen is likely to appreciate. This arbitrage will no longer be profitable. At that point, everyone will quickly sell off various assets and convert back to yen to repay loans. Such selling will naturally cause risk asset prices to fall.

2. The logic behind CPI data: CPI measures whether prices are rising and by how much. If the data is lower than market expectations, it indicates less inflation pressure, and people will think the Federal Reserve is more likely to cut interest rates in January; the US dollar's attractiveness will decline, and funds will flow into other high-yield assets, which is positive for risk assets. But if the data exceeds expectations and inflation remains high, the Fed may delay rate cuts. People will rush to sell other assets and convert to dollars for safety, which will also impact risk assets.