Last week's interest rate hike decision by the Bank of Japan instead triggered the liquidation of yen shorts. The yen has hit a yearly low against major global currencies—some even reaching historical lows. On Monday, the Japanese government bond market also experienced a round of sell-offs.

The logic behind this is actually quite heart-wrenching: a senior official from the Japanese government's foreign exchange affairs directly expressed concerns on Monday, and the implication is clear - the market now generally expects that Tokyo may be forced to intervene in the foreign exchange market. With the year-end holidays approaching, trading liquidity is expected to further shrink, and the risk of the yen breaking down is rising.

From a trading perspective, once the signal of government intervention in the foreign exchange market is confirmed, volatility will significantly amplify.