After the Federal Reserve's decision to cut interest rates by 25 basis points this morning, the Bank of Japan's interest rate decision was announced around 11 a.m. today, maintaining the policy interest rate at 0.25%, marking the third consecutive pause in rate hikes. The yen depreciated against the dollar, breaking through the 155 level. It is worth noting that the focus of the debate regarding the Bank of Japan's rate hikes has shifted from when to raise rates to discussing how high rates will go. (Background: The yen has depreciated for six consecutive days! Analysts warn that the Bank of Japan may be forced to raise rates tomorrow, with 155 being a critical point) The Federal Reserve decided this morning to lower interest rates by 25 basis points but hinted at a slower pace of rate cuts next year, only lowering by 50 basis points. Following this, the Bank of Japan’s interest rate decision was announced around 11 a.m. today, with a result of 8 votes in favor and 1 against, maintaining the policy interest rate at 0.25%, marking the third consecutive pause in rate hikes. According to Kyodo News, the reason the Bank of Japan decided not to raise interest rates is to observe the unclear impact of U.S. President-elect Trump's policies on the U.S. economy and the salary trends in the spring 2025 labor negotiations. Bank of Japan Governor Kazuo Ueda will hold a press conference in the afternoon to explain the reasons for the decision. The Bank of Japan's stance is that if the economy and prices meet expectations, they will consider raising rates. However, given the recent pause in the historical depreciation trend of the yen in the forex market, the risk of sharp price increases is relatively low. Many opinions within the central bank believe that the current situation does not warrant an urgent rate hike. After the Bank of Japan's decision was announced, the yen’s exchange rate against the dollar plummeted, breaking through the 155 level, currently reported at 155.23. This key level of 155 is closely watched by analysts, who previously warned that a breach of this level could trigger verbal intervention from Japanese authorities and exert more pressure on the Bank of Japan to raise rates. Yen observers are shifting their focus to Ueda's press conference in the afternoon to see if any hints about the next rate hike will be given. If the yen continues to depreciate, the central bank may face greater pressure to raise rates. The debate over when the Bank of Japan will raise rates has shifted to how high they will go. Notably, according to Reuters, as market speculation about the timing of the Bank of Japan's next rate hike heats up, there is brewing internal debate about how much rates can be increased. This issue may be discussed at this week’s policy meeting, and Ueda may elaborate on the bank's views on the future path of rate hikes in the afternoon. Estimates from Bank of Japan policymakers indicate that they believe there is room to raise short-term rates to around 1% without impacting economic growth. However, some central bank officials pointed out that recent sluggish consumer spending suggests that rates could be lower. The outcome of this debate is crucial for determining the pace of future rate hikes, as the Bank of Japan plans to raise its policy rate to near neutral levels by early 2027. Most analysts expect that the Bank of Japan will raise short-term rates from the current 0.25% in March next year, which will be an important step towards a neutral rate. Former Bank of Japan board member Takahide Kiuchi believes that once the rate is raised to 0.5%, the bank will slow the pace of rate hikes, as further increases will bring borrowing costs closer to neutral levels. Kiuchi stated that the Bank of Japan may consider Japan's neutral rate to be slightly below 1%, expecting to raise rates to 0.5% in January next year and to 0.75% around September next year. After the rate increases to 0.5%, the Bank of Japan will adopt a more empirical approach to closely assess the impact of each rate hike on the economy. The yen carry trade remains a significant ticking time bomb. Current market attention to the potential risks of yen carry trades is increasing, seen as a possible explosive ticking time bomb. As the Federal Reserve slows its pace of rate cuts, the Bank of Japan adopts a cautious stance on rate hikes, creating a clear divergence in global interest rate policies. Looking ahead to 2025 and 2026, overall economic uncertainty is further exacerbated, and the potential unwinding pressure of yen carry trades may further affect the trends in the cryptocurrency market. The cryptocurrency market, as a high-risk asset, is extremely sensitive to macroeconomic changes. A sharp change in capital flows could lead to increased market volatility, posing challenges for investors. Therefore, closely monitoring the subsequent developments of yen carry trades and the dynamics of various countries' monetary policies will be key to future market observations.