The Bank of Japan (BOJ) has raised its short-term interest rate to 0.75%, marking a 25-basis-point increase from the previous rate of 0.5%. Many economists anticipate the central bank will continue to gradually raise rates, potentially every six months, with projections suggesting it could reach at least 1.0% by late 2026. This move may trigger an aggressive unwinding of the yen carry trade, potentially causing significant liquidations in U.S. markets as investors sell U.S. assets to repay yen-denominated loans. Such actions could lead to substantial capital flows back to Japan.