The president of the Bank of Japan said: The time to raise interest rates is near. "USD/JPY" fell below 150, and the arbitrage liquidation alarm sounded again.

Japan announced the November Tokyo core CPI (excluding fresh food prices) on Friday (29th), which showed a year-on-year increase of 2.2%, significantly higher than the previous month's 1.8% and stronger than the expected 2%. This has further increased the possibility of the Bank of Japan raising interest rates in December, causing the US dollar to yen exchange rate to plummet. Bank of Japan Governor: The timing of the rate hike is approaching What further worries market investors is that Bank of Japan Governor Kazuo Ueda said in a recent interview with the Nikkei Newspaper that given the current inflation and economic trends in Japan are in line with the Bank of Japan's expectations, the timing of the next rate hike is approaching. Although he did not explicitly state that a rate hike will occur in December, he said that the pace of wage growth and the strength of consumption will be indicators for the Bank of Japan's decision on the pace of rate hikes. Kazuo Ueda's comments have pushed up the market's probability of the Bank of Japan raising rates by 25 basis points in mid-December, and have also driven the US dollar to yen exchange rate to briefly fall below 150 on Friday, the lowest since October 21 this year. Remember the stock/currency market plunge in August? You may remember that the Bank of Japan's decision to raise rates by 15 basis points at the end of July, combined with the US Federal Reserve's preparation to cut rates at the time, caused the yen to surge sharply, compressing the profit margins of the "borrow low-interest yen, buy high-yield currency" arbitrage trade, leading to a large number of investors unwinding their positions and triggering a plunge in global stock and currency markets in early August. Although investors have had some time to guard against potentially disastrous consequences since August, if the Bank of Japan does decide to raise rates again in December, it will be the second such move after the one in July this year, and the risk of unwinding the yen carry trade may resurface, potentially impacting the global capital markets. On August 5, Bitcoin briefly plunged to $48,900, the S&P 500 index plummeted 3% marking the largest single-day decline since September 2022, and the Nikkei 225 index even crashed over 12%, as global markets faced selling pressure.