Will The BOJ Unleash Another Christmas Carry-Trade Massacre

As noted earlier, the trigger for the initial selloff in bitcoin (compounded later by news of MSTR creating a reserve buffer to pay future dividends on its preferred stock as well as potentially selling bitcoin), was the unexpectedly hawkish comments by Bank of Japan Governor Kazuo Ueda’s who went a step further than his explanation at his October press conference after the Monetary Policy Meeting (MPM).

On the US economy, he explained that downside risks to the overall economy have eased somewhat. On the fundamental side, Ueda noted that a reduction in uncertainty around the US growth and tariff outlook implied a rising likelihood of the BoJ realizing their domestic central scenario – under which they will continue to tighten policy.