There are two major events to watch in the financial markets in December 2025: the US dollar interest rate cut and the Japanese yen interest rate hike. Today, let's focus on the yen rate hike—this is not a good signal!

In the past 20 years, there have been three yen rate hike cycles. After the 2000 rate hike, the global financial market crashed and the internet bubble burst. The 2007-2008 rate hike triggered the global financial crisis and a major plunge in the Nasdaq. In July 2024, the yen rate hike led to a 15% drop in the Nasdaq, and it may continue this month. The biggest bubble this round may be the AI bubble, and if the yen hikes rates again, the impact will be significant.

For the past 30 years, the yen has had a zero interest rate, leading to over $5-10 trillion in leveraged borrowing. A rate hike will cause capital to flow back and trigger withdrawals, possibly leading to a financial stampede. However, don’t panic excessively—if the market is already in a correction, a yen rate hike will accelerate the decline. I recommend short-term trading, using protective longs, and playing with small positions in major coins. Follow me to stay on top of the market!