The Bank of Japan is set to make a significant decision at its monetary policy meeting on December 19. The market widely expects an interest rate hike this time. Given the current situation, Japan's long-term yen depreciation problem has not been alleviated, and domestic inflation is becoming increasingly stubborn, forcing the central bank to take action.

According to market analysis, the benchmark interest rate is very likely to be raised from the current 0.5% to 0.75%. This is highly significant for Japan — it will be another round of action by the central bank after the slight 25 basis point hike in early 2025. Once implemented, Japan's loan interest rates will reach the highest level in the past 30 years.

What does this mean? For financial markets, a policy shift by Japan as a major economy will influence global capital flows. Expectations of yen appreciation will strengthen, borrowing costs in Japanese markets will rise, and cross-border arbitrage opportunities will shrink — all of which will have a ripple effect on global risk assets, including cryptocurrencies. Cautious investors should pay attention to this change.