This Tuesday, the market's focus took a sharp turn. Just a few days ago, there was heated discussion about the possibility of Japan raising interest rates, and now the attention has shifted directly to whether the Federal Reserve will cut rates. At 3 a.m. tonight, the release of the December FOMC minutes has become the most critical point of interest in the short term.

**What’s the situation with the Yen and Japanese bonds?**

Long-term yields on Japanese bonds (such as the 10-year) have been declining from previous highs, and the Yen is becoming increasingly strong, gradually approaching the key level of 155. What does this indicate? It’s simple— the market’s previous emotional fluctuations around "Japan might raise interest rates" have basically subsided. Now, the market is no longer relying on "expectations" to speculate but is focusing on the real impact: Will Yen appreciation lead to foreign capital fleeing Japanese stocks? Will carry trades that borrow Yen to buy high-yield assets see a wave of liquidation? These are the key issues to watch next.

**Hidden messages in the December FOMC minutes**

Honestly, the market already has a good idea of how many times the Fed might cut rates in 2026 and when the first cut might occur. So, after the minutes are released, large swings in the market are unlikely. But don’t underestimate those details—they are enough to "fine-tune expectations."

Have officials relaxed their concerns about inflation stickiness? Do they have more confidence in a soft landing for the economy? Will anyone hint at an earlier rate cut or, conversely, delay a rate cut? These subtle changes in wording often determine the market’s direction in the coming weeks. So rather than focusing on the big picture, it’s more about how the minutes are worded—this is the real key to the subsequent trend.