The Bank of Japan's rate hike expectations are becoming the next market trigger. The interest rate decision on December 19 is almost certain—currently at 0.5%, it is highly likely to be raised by 25 basis points to 0.75%. But what's more concerning is that this may just be the beginning.

The market is betting on a more aggressive rate hike cycle: from now until reaching the neutral interest rate range of 1.25%, at least three consecutive rate hikes are needed. Looking back at the previous cycle, the Bank of Japan from March 2024 to January 2025 forcibly raised interest rates from -0.1% into positive territory at 0.5%, a move that caught many investors off guard.

Japan's inflation has exceeded 2% for three consecutive years, with prices rising at an outrageous rate, and the public has long been voicing their complaints. The central bank's rate hikes are progressing at a snail's pace, making actual borrowing costs ridiculously cheap—this can't control inflation at all, and might even be adding fuel to the fire.

Currently, it's the North American Christmas and holiday season, and market liquidity is already tight. Coupled with concerns over continuous rate hikes, volatility could cause significant trouble for retail investors. However, don't be bound by a single logic; many factors influence asset prices, and big players love to position themselves amidst panic.

Trading requires multi-dimensional thinking—don't just focus on one expectation.