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December 19th, the Bank of Japan historically raised interest rates to 0.75%, reaching a nearly 30-year high. Surprisingly, after this seemingly "dovish" news was announced, the Nikkei index surged, and global risk assets moved accordingly. The long-anticipated shoe finally dropped—but why did the market choose to celebrate rather than panic?

**Expectations Were Already "Priced In," Uncertainty Is the Real Culprit**

This rate hike was no surprise. Market participants had already incorporated this decision into their expectations, so when it actually happened, it eliminated suspense. Sometimes, the shoe dropping means risk has been alleviated.

More importantly, although 0.75% looks high, in the context of over 3% inflation, the real interest rate remains deeply negative. In other words, Japan’s liquidity environment remains extremely loose, which is a reassuring sign for global asset allocation.

**From "Patient" to "Recovered"**

Japan has shaken off 30 years of deflation. The rate hike itself proves that the Japanese economy has entered a virtuous cycle of rising wages and reasonable price increases. The economic fundamentals are actually more solid. The market’s celebration isn’t just about the rate hike itself, but about the realization of a major uncertainty, with outcomes far better than the worst-case scenario.

**Where Are the Opportunities in the Cryptocurrency Market?**

Banks, domestic demand, and technology sectors in Japan’s stock market will benefit directly. The yen will appreciate modestly, benefiting importers, and won’t cause drastic shocks to global carry trades. For cryptocurrencies, a healthy, predictable Japanese economy means a more stable global liquidity environment, which usually translates into support for risk assets.

Essentially, this rate hike marks the official recovery of a "deflation patient." The market’s reaction has already provided the answer.