Japan's monetary policy is at a critical juncture. The Bank of Japan convened an emergency meeting as yield curves hit historic peaks—a stark signal after three decades of accommodative policy. The underlying issue is structural: $10 trillion in accumulated debt paired with rising interest costs creates an unsustainable trajectory.

For 30 years, the yen carry trade was the engine of global liquidity. Borrow at near-zero rates, deploy capital worldwide, pocket the spread. That model is breaking down. As BOJ tightens and yields rise, unwind pressures mount across markets. When carry trades collapse, liquidity that flooded emerging markets and crypto assets reverses just as quickly.

The implications extend beyond currency markets. Historically, tightening in major economies correlates with risk asset repricing. Watch for capital flows shifting from growth bets back to safe havens. For crypto markets specifically, the unwinding of leveraged positions funded by yen could trigger sharp corrections. Conversely, markets pricing in BOJ pivot hesitation might create volatility opportunities. The next 90 days matter—this isn't just Japan's problem anymore.