HTX DeepThink: US and Japan Tightening May Resonate, Equities and Crypto Face Synchronized Deleveraging Risks

On October 9, Chloe, an HTX DeepThink columnist and researcher at HTX Research, pointed out that the core contradiction in global risk assets has shifted from whether the Fed will raise rates in October to the duration of US high interest rates, the normalization of Japanese monetary policy, and the potential exit of global leveraged capital. St. Louis Federal Reserve President Musalem stated that further tightening may still be needed over the next six to nine months. Although markets expect a pause in October and another hike in December, US Treasury yields remain persistently elevated, liquidity conditions have not improved as a result, and valuations for both US equities and crypto assets are under pressure.

BTC breaking below $83,000 reflects a clear decline in capital allocation willingness in a high-interest-rate environment. If mid-October US inflation data continues to exceed expectations, the probability of a December rate hike may rise further, pushing up real US Treasury yields. Short-term attention should focus on buying support near $80,000. If spot ETFs continue to see outflows and BTC fails to hold above $83,000, it may test the $76,000–$78,000 zone further; ETH and altcoins carry higher leverage levels and thinner liquidity, making deleveraging risks more pronounced.

The Bank of Japan could emerge as an underappreciated risk in late October. As Japan gradually exits its ultra-loose policy, yen funding costs are rising, putting pressure on carry trades that previously borrowed low-yielding yen to allocate into risk assets like US stocks. Should the yen appreciate rapidly, investors may be forced to sell USD assets to repay JPY liabilities, triggering a negative feedback loop of "yen appreciation, asset declines, and leveraged position liquidations." The market volatility in August 2024 has already demonstrated the amplifying effect of this mechanism. If the USD/JPY exchange rate breaks below 155 rapidly, it may signal rising risk of carry trade unwinding, though this would still need confirmation alongside cross-asset volatility and fund flows.

On the US equity front, the mid-October earnings season will serve as a critical inflection point. The AI supply chain still has support from capex and earnings, but highly valued tech stocks are extremely sensitive to real rates. Crypto assets, lacking earnings support and relying more on fresh liquidity, may face greater pressure. Overall, the market leans toward weak consolidation, followed by a technical rebound and then a retest of lows. If US inflation eases, Treasury yields decline, and the yen remains stable, BTC and the Nasdaq still have room for phased recovery; however, if US high interest rates and rapid yen appreciation resonate with each other, a new wave of synchronized deleveraging across stocks and crypto could emerge in late October.

Note: The content herein does not constitute investment advice, nor does it constitute an offer, solicitation, or recommendation of any investment product.