The Japanese market is extremely divided. The Nikkei 225 exceeded 67,000 points and surged nearly 30% during the year. However, the yen approached 160 and the 30-year Japanese bond yield exceeded 4% and hit a record high. The double destruction of debt and foreign exchange is due to the inversion of interest rate differentials between the United States and Japan and crazy fiscal expansion. The stock market carnival is based on the illusion of currency depreciation. The Bank of Japan meeting on June 16 became a key turning point, with the probability of raising interest rates rising to 78%.

The Bank of Japan raised interest rates to a 30-year high, but the yen fell instead of rising. The main reason is that policy signals that did not meet expectations were interpreted as one-time adjustments, fiscal expansion eliminated the effects of tightening, and structural difficulties such as trade deficit, low neutral interest rates, and tax system issues were superimposed. The market outlook depends on structural reforms, focusing on asset rotation in the short term, and deploying high-quality enterprises in the medium and long term.