The yen continued to strengthen, the Nikkei 225 index fell, and foreign capital left the Japanese stock market on a large scale. As market expectations for an interest rate cut by the Federal Reserve have increased, the dollar has weakened, boosting the appreciation of the yen, and the Bank of Japan's hawkish signals have further strengthened expectations of interest rate hikes. According to a Bloomberg survey, the vast majority of economists expect the Bank of Japan to raise interest rates again before the end of the year. (Preliminary summary: The Bank of Japan is hawking again: If inflation is in line with expectations, interest rates will be raised again, and the yen is on a roller coaster) (Background supplement: Bank of Japan President: The economy is in line with expectations, and interest rates will continue to rise.) The yen rose sharply, and Japanese stocks were not Wonderful?) On Friday (13th) this week, the Nikkei 225 Index fell sharply in the short term, falling 0.9% on the day, mainly affected by the continued strength of the yen and the withdrawal of foreign capital. USD/JPY fell below the 140 mark in early Asian trade and was down 0.73% on the day at 140.76. In the week ending September 7, the Japanese stock market experienced its largest weekly net outflow of foreign capital in six months, with net foreign capital selling of Japanese stocks reaching 902.3 billion yen, the highest record since March 16. Will the Bank of Japan raise interest rates next week? On July 31, the Bank of Japan raised its benchmark interest rate to 0.25%. Analysts' median forecasts show they see rates rising to 0.5% by the end of this year and to 0.75% by the end of 2025. Slightly more than half of BOJ watchers expect the BOJ to raise interest rates as early as December, and 87% of economists surveyed believe the BOJ will raise interest rates by the end of January next year, according to a Bloomberg survey. Most analysts believe that at the policy meeting next Friday (20th), the Bank of Japan is unlikely to take immediate action to raise interest rates, and may make adjustments as early as October. The Bank of Japan will conclude its two-day policy meeting on September 20 and announce its latest interest rate decision. Bank of Japan Governor Kazuo Ueda and other governors stressed the need to closely monitor the impact of financial market fluctuations on the inflation outlook, suggesting that there may be no major action at this meeting. Image source: Bloomberg Market turmoil and global economic impact Sentaro Mori, chief strategist at All Nippon Asset Management, said: "If the U.S. Federal Reserve finally cuts interest rates below 3%, the possibility of the Bank of Japan raising interest rates will be significantly reduced.” Katsuhiko Aiba, Japan economist at Citigroup Global Markets, believes: “The possibility of Japan’s national election this fall is increasing, and the U.S. presidential election will also have a clear impact on financial markets, which makes the policy meetings in September and October important to observe financial markets. Important timing for market and economic conditions." Bank of Japan observers pointed out that the yen would need to appreciate to about 125 yen per dollar to pose a threat to the Bank of Japan's interest rate hike plan. Japan's interest rate hike may lead to unwinding of carry trades and drag down the market. On the other hand, if the Fed cuts interest rates sharply next week but the Bank of Japan raises interest rates, it is likely to face the risk of further unwinding of yen carry trades, affecting credit, stocks, U.S. bonds and even crypto. Currency and other markets further dragged down global risk assets. But if the Bank of Japan does not raise interest rates, it will require a higher level of financial repression, which may also pose serious financial stability risks to the country, including the potential threat of a collapse of the yen. It can only be said that the Bank of Japan is currently in a dilemma. Further reading: Arthur Hayes: The Fed’s interest rate cut “yen arbitrage bomb” may ruin the market feast, and there is only one solution. Related reports: GDP unexpectedly revised downwards” Japanese stocks plummeted by thousands of points, will it not hinder the Bank of Japan from accelerating interest rate hikes? The Bank of Japan is hawkish again: If inflation is in line with expectations, it will raise interest rates again, and the yen is on a roller coaster. The president of the Bank of Japan: The economy is in line with expectations, and interest rates will "continue to be raised." The yen has risen sharply, is it bad for Japanese stocks? 〈The yen has risen again and foreign capital has been selling strongly for three consecutive weeks. Will the Bank of Japan raise interest rates next week? The Arbitrage Bomb is Difficult to Solve> This article was first published in BlockTempo's "Dong District Dongzhi - the most influential blockchain news media".