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🇯🇵 Why Japan Is Highly Sensitive to Federal Reserve Policy Data shows that a large portion of Japan’s portfolio investments are held in the United States, both in bonds and equities. This means: Japan is highly dependent on US yields and the stability of US financial markets. Changes in Federal Reserve policy directly impact Japanese capital flows. If the Fed: Remains hawkish, strong USD, high US yields, capital stays in the US Turns dovish, potential capital repatriation, pressure on the USD and yields This matters because: Japan is a major global creditor. Shifts in Japanese capital flows can influence global liquidity, including crypto markets. FedWatch is not only about rate decisions, but about who is most affected by those decisions. #FedWatch #Macro #GlobalLiquidity