The Bank of Japan yesterday pulled the trigger—interest rates jumped from 0.5% directly to 0.75%, marking the most aggressive rate hike in decades. And the result? The market responded with the most ironic reaction: the yen didn't rise but fell, depreciating all the way to 157. At the same time, the Nikkei index soared over 2%. What's really going on here?

**First Flaw: Rate Hike Becomes a Selling Point**

Here's the problem—the market had already priced in the rate hike long ago. When the final decision was announced, it instead signaled an opportunity to sell. Even more frustrating, the central bank also issued a statement: "Future rate hikes will be very cautious." This is outright contradictory. One foot on the accelerator, while claiming there's no fuel—how can the market believe your tightening resolve? Capital immediately turned away.

**Second Variable: The Invisible Hand of Supply Chain Restructuring**

Japan has long been trapped in a trade deficit, constantly selling yen to buy dollars for energy imports. Now, there's a new issue—global supply chains are relocating en masse. Costs are shifting from China to Southeast Asia and North America, increasing Japanese companies' dollar hunger. This isn't something the central bank can control; it's geopolitical decisions at play. Structural dollar demand has suppressed the yen's decline—no policy can change that.

**Third Truth: Merciless Capital Voting**

Rate hikes should make government bonds more attractive, but global capital is voting with its feet: the yields aren't enough. Instead, they flock into Japanese stocks—valuations are cheap, and returns are more enticing. Government bonds are ignored, while the stock market is fighting fiercely. That's why stock prices are soaring while the exchange rate is free-falling—capital ruthlessly sells bonds to buy stocks.

**Final Lesson**

This "counterintuitive market" plainly shows one thing: in the face of geopolitical tensions and the flood of global capital, traditional tools of central banks are losing effectiveness. Who truly controls asset prices? It’s no longer the central bank. It’s capital, it’s great power games, it’s supply chain logic.

Where is the bottom of the yen? No one knows. But one thing is clear—the old rules of the game have indeed changed.