Recently, someone keeps asking me this question: Japan raises interest rates, why do global assets fall together? It feels like the influence is ridiculously large.

Actually, this has nothing to do with the US-China conflict, nor does it mean Japan suddenly became much stronger. But it is indeed a switch that can directly manipulate the direction of global funds.

Many people are unaware of a background detail. From 1999 to now, Japan has been playing the game of zero interest rates, or even negative interest rates, for a full 25 years. Some might think: So if I deposit money in a Japanese bank, I get no interest? Here, I need to clarify. The ones truly achieving "almost zero-cost financing" are always large institutions and financial capital—they complete these transactions in the interbank and international markets.

So what do they do with this money? The route is quite straightforward: borrow yen → exchange for USD → invest in Bitcoin, gold, US stocks. As long as assets are rising and financing costs remain extremely low, this logic will be continuously amplified. And this is definitely not a small game played by a few people. The scale of "borrowing yen and betting on global assets" is about trillion.

So, you can think of the yen as: the tap of the global financial market.

When Japan starts to raise interest rates or signals a clear rate hike, the yen will appreciate. Those who borrowed yen before will see their repayment costs skyrocket instantly. They won't sit down and think about strategies; their first reaction is only one: sell assets quickly, exchange for yen, and pay off the debt.

The result is what you see: Bitcoin drops, gold drops, US stocks also fall. But this isn't because these assets suddenly became worse; it's because a large amount of funds was simultaneously pulled out. The overall market tension is essentially the shockwave caused by this reversal of capital flow.