The recent statements by Bank of Japan Governor Kazuo Ueda have completely rewritten market expectations regarding its policy direction.

In a speech at the Economic Planning Agency, this previously considered "dovish" central bank leader suddenly adopted a more hawkish tone. He pointed out that wages are rising, prices are running high, and the 2% inflation target has been achieved, while real interest rates remain deeply negative. The implication behind this statement is clear: continuing to maintain negative interest rate policy is no longer tenable in the face of inflation.

How did the market react? A week ago, during a press conference, Ueda was cautious in his words, but traders had already sensed the shift, and the yen depreciated against the dollar to 157. After this speech, Wall Street's short positions began to wail—the foundation of Carry Trade is starting to loosen.

What does this mean? Japan's over thirty-year era of zero and negative interest rates is officially counting down. The yen's role as a "free ATM" is about to end, and Japan's bonds, once known as the "world's lowest-yield junk bonds," are also set to be redefined.

From a market perspective, global capital is rapidly re-evaluating Japanese assets overnight. For traders holding short positions in yen, this is a signal that must be taken seriously. Ueda's next move is likely to be a genuine rate hike.

How this shift in monetary policy will affect global liquidity and risk asset allocation remains to be seen.