Right now, everyone is focused on those 25 basis points from the Fed, but to be honest, this move has already been priced in. BTC pulled back from $80,000 to $94,000, all on rate cut expectations. The real game-changer is actually next week’s move from the Bank of Japan.

Just look at history—back in 1998, when Japan ended its ultra-low interest rate policy, all the money in Asia got sucked away instantly. Indonesia and Thailand couldn’t handle it, and South Korea was on the brink of national bankruptcy. The Fed did a symbolic 25bp rate cut back then, but the yen suddenly surged at the start of October, US tech stocks crashed, and the Fed was forced to slash rates by 75bp in one go to save the market. Only after that did US stocks stage a massive rebound.

Why is a yen rate hike so brutal? The logic is straightforward: global capital borrows low-yield yen to arbitrage US Treasuries. Once the yen strengthens, everyone has to dump US Treasuries to buy back yen and repay their debts. US Treasury yields soar, and high-risk assets—tech stocks, BTC, all of them—take a hit. This playbook still works today.

Recently, looking at CFTC and CME contract positioning data, it’s looking pretty weird, like everyone is waiting to cash out after tonight’s rate cut is confirmed. But the real risk window is next week: Japan’s rate hike coinciding with US CPI data. If CPI drops another massive surprise, that means rate hikes plus inflation squeezing the market from both sides, and volatility could get even crazier.

So the key is to watch what Powell says tonight. If it’s a dovish rate cut, the market can breathe a little. But if it’s a hawkish rate cut combined with a Bank of Japan rate hike, the market is going to be a tough ride ahead.