The Bank of Japan officially announced today that it has raised the benchmark interest rate by 25 basis points, bringing the new rate to 0.75%, the highest in 30 years.

The next question becomes interesting. What determines the short-term market trend is not actually the fact that this rate hike has been implemented, but whether BOJ Governor Ueda Kazuo will signal a more hawkish stance than market expectations at the press conference.

Based on current market pricing, it is actually more likely that an upward expectation gap will form, meaning the market's expected threshold is already quite high.

Looking at the facts makes it clear. All hawkish expectations regarding rate hikes have long been priced in. The market has fully digested several key pieces of information: Japan has officially entered a rate hike cycle, and yen arbitrage trading faces a medium-term reversal risk. Regarding Governor Ueda's own judgment, the market assumes he is cautious and data-dependent, unlikely to easily provide a clear timeline for further rate hikes.

This implies a reversal logic: the market is now more afraid of "more hawkish" than of "more dovish."

So why does the market tend to be more bullish before the press conference? There are several reasons.

First, if Ueda is to truly surprise with a hawkish stance, the threshold is actually quite high. He would need to explicitly say that rates will be raised again in the first half of 2026 or even earlier, or hint that the terminal rate will be significantly above 1.5%, or give a strong "bottom line" signal on yen policy. But based on his past style, these are unlikely to happen.

A more realistic scenario is that he won't say anything new. If Ueda emphasizes that inflation still has uncertainties, reaffirms that policy will be gradually, cautiously, and data-dependently implemented, and does not provide a specific timeline for rate hikes, how will the market interpret this? It would be "no more hawkish than expected." In trading terms, this usually results in short-term yen weakness, risk asset sentiment beginning to recover, and BTC and ETH likely experiencing technical rebounds before and after the press conference.

Additionally, the current position of the crypto market itself provides fertile ground for a rebound. The impact of rate hikes has already been priced in, market positions remain cautious, and no new macroeconomic negatives have emerged in the short term. Any statement that is "not hawkish enough" could trigger short covering.

Summarizing from a trading perspective, this is a typical situation: the worst-case expectations are already priced in, but the best-case outcomes are not yet reflected.

If the speech is moderate or neutral, there is a short-term rebound window in the crypto market. If it is clearly hawkish, the market will be suppressed again.

Before the press conference, three signals should be closely watched. The first is whether USD/JPY weakens in advance, which can reflect whether funds are betting on "less hawkish" expectations. The second is whether BTC holds steady at key support levels, which determines whether a rebound can be initiated. The third is whether US stock futures remain stable, as global risk asset sentiment is crucial.