Japan's actions cause global financial markets to fluctuate - the logic behind this is actually not that complicated.

In short: Japan has been in a zero-interest rate or even negative interest rate environment for almost a quarter of a century since 1999. This does not mean that ordinary people can really borrow money from banks for free; rather, large institutions and financial capital can finance themselves in the interbank and international markets at almost no cost.

With such convenience, the strategy of smart money comes into play—borrowing yen, exchanging it for dollars, and then shopping globally: Bitcoin, gold, US stocks, as long as the prices are rising, keep buying. Asset appreciation and financing costs are almost zero, and this logic continues to amplify, with more and more participants. To what extent has the scale grown? A rough estimate suggests that the scale of this type of cross-border arbitrage has reached 4 trillion dollars.

What does this mean? The yen has become the master switch of the global financial market.

When the Bank of Japan signals a rate hike and starts to actually raise interest rates, the situation reverses. The yen will appreciate, and those institutions that borrowed in yen will suddenly face sharply rising repayment costs. They will not sit idly by and slowly plan their response; there is only one reaction: to immediately sell off their assets, convert back to yen, and repay their debts.

The result is the scene you see – Bitcoin falls, gold falls, and US stocks also fall. On the surface, it seems that these assets have suddenly deteriorated, but in fact, it is a concentrated outflow of global liquidity. This is not just an issue of a single market, but a financial reaction chain that affects the entire system. Understanding this mechanism helps explain why a country like Japan, with such a large scale, can have such a profound impact on asset prices around the world when it changes its interest rate policy.