The Federal Reserve just finished raising interest rates. The global market's attention is all on Powell and Trump.
But the real thunder is buried in Tokyo—and the fuse is burning.
Japan is entering the "Silver Week" long holiday next week.
You might think this has nothing to do with you. Let me tell you, last summer, when the Bank of Japan raised rates, the Nikkei index crashed 12.4% in a single day, dragging global risk assets down with it.
Now, the same script is brewing again. The difference is that liquidity is thinner, leverage is heavier, and it’s happening while you’re asleep.
First, an abnormal fact: Japan raised rates, but the yen collapsed.
On September 18, the Bank of Japan announced a 25 basis point rate hike, raising the rate to 1.25%, the highest in 31 years.
Normally, rate hikes mean a stronger currency. That’s what textbooks say.
But the vote was 7 to 2. Two members voted against it.
The market saw this and thought: "Hey, even insiders aren’t united, do you still dare to raise rates later?"
So the yen didn’t rise; instead, it was wildly sold off, depreciating directly to 158 yen per US dollar, a two-week low.
The central bank raised rates, but the local currency plunged. Textbooks got torn up.
Then the Japanese government panicked.
The day after the rate hike, the government and central bank jointly conducted a "currency inquiry."
In plain terms, this was a warning to speculative funds: bullets are loaded, you decide what to do.
Once the news broke, the yen quickly rallied from 158 to 156. The market instantly got nervous.
But think carefully—why do this right before the "Silver Week" holiday?
The chief forex strategist at Mitsubishi UFJ Morgan Stanley Securities said clearly: "The purpose is to warn speculative funds not to short the yen during the consecutive holidays."
In plain language: "I know you want to cause trouble while we’re on holiday, but I’m ready."
But history tells you, the more warnings, the more dangerous it gets.
In the past month, Japanese authorities have already spent 15.4 trillion yen (about $98.6 billion) intervening in the forex market, setting a record for the highest monthly intervention. Including interventions in April and May, the total for 2026 has reached 27 trillion yen, breaking the annual record.
Over $98 billion spent, yet the yen still hovers at 158.
What does this mean? It means the pressure is so great that throwing money at it can’t stop it.
When intervention becomes routine, the next move is often more intense.
The deadliest threat isn’t intervention, it’s carry trade reversal.
How much money worldwide is playing the "borrow yen, buy dollar assets" game?
$2.34 trillion.
Jefferies analyzed data from the Bank for International Settlements and found that cross-border yen borrowing has soared to a record 360 trillion yen, the largest scale in nearly 30 years.
This $2.34 trillion is the fuel for global risk assets.
What happens if the yen violently appreciates and the $2.34 trillion is forced to unwind?
July 2024 gave the answer: the Bank of Japan unexpectedly raised rates, the yen surged from 154 to 141 within days, carry trades were forced to unwind, global stock markets sold off in a chain reaction, and the Nikkei index plunged 12.4% in a single day.
But this time the situation is more subtle.
The Bank of Japan signaled the rate hike weeks in advance, so the market was prepared. But the problem is—
"Being prepared" doesn’t mean "no leverage."
Futures data shows that as of the week of September 1, the net short position on USD/JPY was 92,227 contracts. Although lower than the July high of 163,000 contracts, remember—these are only futures data. The actual positions of leveraged funds could be several times this number.
More importantly: the annualized return on USD/JPY carry trades has dropped from 5%–6% in 2024 to now 2.5%–3.5%.
Returns halved, risks doubled. Can your position still hold?
Why is crypto the first to be sold off?
Because crypto trades 24/7. When Asia is on holiday and Europe and the US markets are closed, crypto is the only market where you can "run anytime."
When many run, a stampede happens.
And crypto’s liquidity depth compared to forex and US stocks? It’s miles behind.
The current market: Bitcoin just surged to $81,000, up 4.58% in 24 hours, once rising 8% in a single day. The US spot Bitcoin ETF attracted $591 million in two days, and shorts were liquidated for $470 million.
Everyone is shouting "The bull is back."
But the most dangerous time in a bull market is when everyone feels safe.
Three things you need to know:
First, during Silver Week, forex market liquidity may be only one-third of normal. Any large order could trigger instant jumps of dozens or even hundreds of pips. Your stop loss could easily be triggered by a gap.
Second, Japanese authorities have a tradition of "holiday intervention." In April this year, they conducted their first intervention during a Japanese long holiday. Now that 15.4 trillion yen has been spent, if the yen approaches 160 again during Silver Week, authorities may be forced to intervene again.
Third, Bitcoin just broke above $80,000, the most important technical level this year. If carry trade reversal during Silver Week triggers sell-offs, this level could become a "bull trap"—those chasing will be buried, and those watching will be relieved.
Next week, you should watch if USD/JPY approaches 160 again.
If it does—don’t wait for the news, reduce your positions in advance.
If you insist on holding leveraged positions during Silver Week, all I can say is: good luck. Because that week, you won’t even be able to set stop losses.
You feel great when BTC rises 5%. But if the yen carry trade reverses during Silver Week, BTC might give back gains next week, and the speed will be too fast for you to react.
Holiday low liquidity will amplify volatility by 3 times.
Can your position withstand 3 times the volatility?
$BTC$ETH$BZ#BTC重返8万美元，资金面出现修复
Disclaimer: OKX Orbit content is provided for informational purposes only. Learn more
