2025-12-19 15:22:52

On December 19th, the Bank of Japan acted as expected, raising the policy interest rate directly from 0.5% to 0.75%, reaching a new high in 30 years. The market had been waiting for this "bomb" to drop, but what happened? The Nikkei 225 surged over 1%, the yen stabilized, and global stock markets also exhaled a sigh of relief. It seems contradictory, right? How can a rate hike be a good thing?

**Why the negative impact didn't materialize**

First, the market had already fully digested this news. The probability of a rate hike was priced in at nearly 100%, and funds had already adjusted their positions in an orderly manner, unlike last year when a surprise hike caused a storm of liquidations.

Second, although 0.75% looks high, the core CPI is still above 3%, so the real interest rate remains negative. The central bank itself called this "gradual normalization," which is not a tightening strategy at all.

Most importantly, Japan's economic fundamentals are genuinely improving. Wages are steadily rising, inflation is sticky, and Japan is shaking off its 30-year deflation curse, entering a virtuous cycle of wages and prices.

**How to position after the rate hike**

In the stock market, bank stocks will see an expansion of net interest margins, domestic demand and tech stocks have explosive potential, and the Nikkei may hit new highs. The yen will appreciate gradually, import costs may decrease, and there won't be a sharp surge. From a global perspective, the space for carry trade reversal is limited, which is generally positive for A-shares.

The logic behind this move is quite clear—the market has already digested expectations, and the economic fundamentals support this, so the rate hike instead signals positive news.

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RadioShackKnight

· 2025-12-20 20:06

This wave has indeed been absorbed in advance, but the real interest rate is still negative, no wonder the stock market is so calm. Japan has finally found its rhythm this time; wages and prices are both rising, and they are finally breaking free from deflation. I am optimistic about bank stocks; there is still room for net interest margin expansion. Wait, is the appreciation of the yen really good news for A-shares? Be careful with carry trade strategies. I believe the Nikkei will hit a new high, but don’t let the Japanese government’s tone suddenly change and ruin it again. The 30-year deflation curse is finally about to be broken. It’s not easy.

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DefiPlaybook

· 2025-12-20 02:33

According to on-chain historical data, the logic that the market has fully priced in a 100% expectation of a rate hike by the central bank is actually similar to the risk hedging mechanism of carry trades—early participants have already optimized their risk exposure through dynamic position adjustments. It is worth noting that the fact that real interest rates remain negative, from the perspective of capital allocation efficiency, actually enhances the relative attractiveness of equity assets. The specific analysis is as follows: the degree of improvement in Japan's economic fundamentals, the matching of wage growth and inflation stickiness, and the impact of bank net interest margin expansion on risk pricing—these three dimensions together form the underlying logic of the rate hike's positive outlook. To some extent, this is akin to the scenario in DeFi lending protocols where liquidation risks are preemptively absorbed.

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DegenDreamer

· 2025-12-19 15:51

Haha, reaching a 30-year high and still rising, the market's move is really impressive. Has Japan emerged from deflation? Now that's a real surprise. The carry trade crash was overdue. Bank stocks should be able to enjoy the dividends this round, time to make a move. Although the A-shares are positive, other factors still matter, don't get too optimistic. The yen appreciating makes imports cheaper, this logic is clear—just see how long it can last. Real interest rates are still negative; raising interest rates might just be a bluff?

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LiquidationKing

· 2025-12-19 15:48

The limited reversal space for carry trade this time, the A-share bottom-fishing opportunity has arrived. Japan has finally turned around in these 30 years, it feels like Asia is about to take off. Oh, the market has long since digested this, I'm just worried retail investors are still debating whether rate hikes are bearish. Bank stocks should be optimistic in the next quarter, there is really room for imagination in net interest margin. Actual negative interest rates, you say the central bank's move is really brilliant, on the surface it looks tough but actually relaxing. The yen's moderate appreciation isn't causing much turbulence, I'm just thinking when there will be a sharp surge. Wage increases and rising prices form a benign cycle, Japan is about to rise, I am long-term optimistic.

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MaticHoleFiller

· 2025-12-19 15:42

It's been fully digested long ago. This rate hike is just a confirmation, nothing new. The real interest rate is still negative, and Japan can't change that. They're overhyping it.

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SatoshiChallenger

· 2025-12-19 15:38

Interesting, another argument that "the market has already priced in expectations" has emerged. The last time this was said was at the end of 2018. Data shows that Japan's real interest rate is still negative, which logically means no rate hikes. Ironically, the statement that the carry trade space is "limited" was also said half a year ago. I'm not criticizing; if you really look at the economic fundamentals, how long wage increases can sustain remains to be seen. Let's make a bet: will the A-shares really be "slightly positive"? The Bank of Japan's recent actions are actually just giving the market a reassurance shot; new highs are not surprising. Wait, core CPI is still over 3%; why say the deflation curse is broken?

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LidoStakeAddict

· 2025-12-19 15:27

Damn, hitting a 30-year high and still going up, this market is really anti-human haha Japan's move this time is brilliant, raising interest rates is actually good news, they've already digested it long ago Are bank stocks rising? I need to pay attention, the real interest rate is still negative, this detail is crucial Feels like carry trade is about to die, but how it will affect our A-shares still depends on the follow-up Wait, is the Japanese economy really taking off? Has the 30-year curse been broken so easily? 0.75% may seem aggressive, but it's not that tight, haha, the central bank is playing it slick I think the Nikkei hitting a new high is promising, domestic demand stocks definitely have a chance

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