Bank of Japan Governor Kazuo Ueda’s remarks on June 10, 2025, have once again attracted significant global market attention. Ueda stated that if potential inflation continues to accelerate, the Bank of Japan will continue to push for interest rate hikes. However, BitMEX co-founder Arthur Hayes…seeDifferent market signals have led him to express on X that the current situation in Japan shows “inflation is insufficient to trigger” rate hikes. Hayes believes that the Japanese public generally does not welcome the negative impact of rate hikes and predicts that if the Bank of Japan chooses to delay quantitative tightening (QT) at the upcoming June meeting, or even restart some quantitative easing (QE), the global risk asset market will迎来 a significant rise.

What is the implication of the Central Bank’s statement?

Ueda Kazuo’s remarks were made against the backdrop of Japan’s long-term implementation of ultra-loose monetary policy to combat deflation, facing rising global inflation pressures and gradually increasing domestic inflation in recent years. The Bank of Japan is gradually adjusting its policy direction, and the market is highly vigilant about the specific timing and extent of interest rate hikes. Traditional views suggest that raising interest rates can help curb inflation, but it may also put pressure on economic growth.

Arthur Hayes has a different interpretation of this. He has previously questioned the Bank of Japan’s plan to reduce bond purchases, warning that the central bank may underestimate the bond market’s sensitive reaction to rising interest rates, which could lead to market volatility. Hayes pointed out:

“Most Japanese people are probably not happy about the interest rate hike. I believe that if the Bank of Japan decides to delay quantitative tightening in the upcoming June meeting, or even quietly restart some quantitative easing, then the global risk asset market, especially cryptocurrencies, will be getting ready for a grand party.”

Hayes’s logic is that if the Bank of Japan restarts QE or delays QT, it will maintain a low-interest-rate environment in the market, prompting investors to seek high-return risk assets such as Bitcoin and stocks. He believes that the continued weakness of the yen is also one of the potential factors driving the rise in global risk asset prices.

Potential Effects of Japan’s Bond Market Alarm and Weak Yen

Recently, the fluctuations in the Japanese bond market, such as the rise in government bond yields and a decrease in demand, have led some analysts (including Hayes) to believe that there is a correlation with the rise in prices of cryptocurrencies like Bitcoin. In their view, Bitcoin is seen as a tool to hedge against sovereign credit risk, especially in the context of Japan’s high government debt ratio.

Hayes specifically mentioned that the Norinchukin Bank, Japan’s Central Bank of Agriculture, Forestry and Fisheries, incurred a paper loss of approximately $12.6 billion due to its holdings of large amounts of overseas bonds, which he believes may deter other investors from purchasing similar assets and further impact the stability of the global bond market. He anticipates that if the Bank of Japan ultimately adopts a dovish stance, it could not only boost the prices of risk assets but also sustain the weakness of the yen, which would have far-reaching effects on global asset allocation.

Against the backdrop of most major Central Banks around the world raising interest rates to combat inflation, the policy stance of the Bank of Japan appears unique. Its decision-making in the June meeting will undoubtedly have a critical impact on both the Japanese domestic market and the global financial markets. Whether Hayes’s predictions come true, especially regarding the boost to risk assets like Bitcoin, and the sustainability of the yen’s weakness, will be the focal points of market attention in the future.

Statement:

1. This article is reprinted from [BLOCKTEMPO] Copyright belongs to the original author [0xJigglypuff] If there are any objections to the reprint, please contact Gate Learn TeamThe team will process it as soon as possible according to the relevant procedures.
2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Other language versions of the article are translated by the Gate Learn team, unless otherwise mentioned.GateUnder such circumstances, copying, disseminating, or plagiarizing translated articles is not allowed.