The Bank of Japan's rate hike is now a certainty. In a certain prediction market, the probability of Japan raising interest rates has soared to 98%, indicating that traders who are putting real money on the line largely agree — a rate hike is coming.

Do you remember the last time Japan increased interest rates? The crypto market plunged sharply at that time. What's the problem? The rate hike was too aggressive. Japan had just emerged from a negative interest rate era, and they went straight for a heavy-handed move, catching the market off guard.

This time, the situation is different. The market anticipates a moderate 25 basis point hike. Why isn’t it as frightening? Because since the last hike, yen arbitrage positions and hot money have already started to withdraw. A 25 basis point increase is basically within everyone's psychological expectation.

But here’s a key "but": if the Bank of Japan announces a 50 or even 75 basis point hike, then the story changes. The market could replay the previous drama and experience another sharp decline.

In simple terms, the issue this time isn’t whether they will raise rates, but how much they will raise. The market has already prepared psychologically for a moderate increase; a sudden shift to an aggressive policy would be the real black swan.