The Bank of Japan announced a rate hike, with the policy interest rate rising to a thirty-year high. The market reaction was unexpected—Nikkei Index surged strongly, U.S. stocks moved upward in tandem, and cryptocurrencies also showed signs of stabilization. The logic behind this "positive reaction" is worth a deeper understanding.

**Why is the market celebrating?**

First, rate hikes have long been a consensus in the market. Investors had already priced in this expectation in advance, so the actual announcement instead released uncertainty, and sentiment stabilized accordingly. Second, there is the issue of actual liquidity—although a 0.75% policy rate appears tight, with inflation exceeding 3%, the real interest rate remains in negative territory, meaning market funding conditions have not truly tightened.

But the most critical factor is the shift in the economic outlook. This rate hike signals that Japan may be emerging from three decades of deflation. Wages and prices are entering a healthy cycle, and the economy is transitioning from recession to growth—this has significant implications for global capital markets. An economy that is regaining vitality is more attractive than a market stuck in prolonged deflation, and this is the market’s genuine optimistic reason.

**Which areas are worth paying attention to?**

Financial stocks and domestic consumption sectors in the Japanese stock market are direct beneficiaries. The possibility of a mild yen appreciation increases, and short-term carry trades are unlikely to withdraw en masse, which helps stabilize global liquidity. Meanwhile, market risk appetite is gradually recovering, and the sentiment for risk assets like cryptocurrencies is also warming. When global economic expectations shift from "stagflation risk" to "moderate growth," risk assets tend to attract more attention.

Overall, this is not just Japan’s story but an important turning point for the global liquidity environment and risk appetite.