Recently, Japan's inflation rate surpassed 3.0%, marking the first time in 46 years that it is higher than that of the United States. This seemingly simple data conceals significant variables in the market.

The bond market is the first to be affected. According to market research, for every 1 percentage point that inflation exceeds that of the United States, it could trigger a bond sell-off worth approximately $100 billion. Currently, the inflation gap between Japan and the United States has already formed, and institutional investors will inevitably adjust their asset allocations.

The more critical factor is the Bank of Japan. Against the backdrop of rising inflationary pressures, the likelihood of interest rate hikes is increasing. Once the Bank of Japan takes action, the global liquidity environment will tighten further — which is undoubtedly a test for the crypto market that has become accustomed to a loose environment.

BTC and ETH investors need to pay attention, as multiple bearish factors may lead to significant downward pressure on the market. Keep an eye on the direction of the Bank of Japan and fluctuations in the bond market, as these will directly impact the short-term performance of crypto assets.