Do you remember when we discussed the macro market several times two years ago, we focused on Japan's withdrawal from YCC, Powell's delayed interest rate cut, and the potential impact of Japan's interest rate hike on global asset prices. Especially the severe correction on August 5, 2024, which still leaves a deep impression today. The core of that round of impact was not only the Bank of Japan's interest rate hike itself, but also the global yen financing transactions generated by Japan's years of ultra loose policies, which encountered reverse liquidation in a short period of time. For a long time, Japan has played a role as a "peripheral buffer" in the US dollar system, while the Japanese yen has become an extremely important low-cost financing currency for global arbitrage funds. A large number of institutions borrow low interest Japanese yen and then allocate it to US stocks, technology stocks, emerging markets, high interest currencies, and other high beta assets. Therefore, once the policies of the Bank of Japan, the yen exchange rate, and global risk appetite change simultaneously, the reverse volatility of yen financing legs can easily become a deleveraging trigger for the global market. If there is indeed an obvious foam in the current US stock market, especially the AI chain has been highly crowded, then what really needs to be vigilant in the short term is not a single point of bad news, but the resonance of multiple variables in the same time window. And this time, Japan is likely to become the key fuse again. Specifically, there are two potential trigger points that are particularly noteworthy. Firstly, the Bank of Japan may implement a "dovish interest rate hike" on June 16th. The so-called dovish interest rate hike is not essentially the Bank of Japan actively and firmly entering a continuous tightening cycle, but more like a defensive interest rate hike forced to be taken after the yen approached the sensitive exchange rate of 160. That is to say, the purpose of raising interest rates is not necessarily to actively suppress inflation, but to stabilize the exchange rate, stabilize expectations, and avoid further market testing of the policy bottom line of the Japanese Ministry of Finance and the central bank. But the paradox here is that dovish interest rate hikes may not really appease the market. If the Bank of Japan sends an overly dovish signal after raising interest rates, the market may think that the Bank of Japan is only symbolically forced to take action by the exchange rate, and the subsequent tightening determination is insufficient. The yen may continue to be under pressure, and even test the 160 level again. In this way, the market will start trading Japanese intervention risk, JGB volatility risk, and policy communication loss of control risk. On the contrary, if the Bank of Japan's statement is too hawkish and the yen appreciates rapidly, it may directly trigger the closing pressure of the yen's carry trade. Trading in Japanese yen, buying US stocks, and other risky assets will be forced to deleverage once the financing currency rebounds rapidly. In other words, the Bank of Japan is facing a very narrow policy channel this time: neither too dovish nor too eagle. Secondly, some suppliers of tungsten hexafluoride in Japan are facing the risk of production stoppage or significant reduction. Tungsten hexafluoride, also known as WF ₆, is an extremely critical process material in advanced semiconductor manufacturing, used in tungsten deposition and other processes. It has potential connections with DRAM, NAND, advanced logic chips, HBM, and AI chip manufacturing chains. It is not the NVIDIA GPU, HBM, advanced packaging, or optical module that the market usually likes to discuss, but it is precisely these hidden upstream materials that are often the easiest to become supply chain vulnerabilities at critical moments. If there is a substantial halt, significant reduction or delivery uncertainty in the supply of Japanese WF ₆, its impact on the market may not immediately manifest as an actual interruption of AI chip supply, but rather as a shake of valuation narrative. The most expensive part of the AI chain currently is not just profit itself, but the market's pricing for future delivery certainty, computing power demand certainty, cloud vendor capital expenditure certainty, and Nvidia's long-term monopoly certainty in the ecosystem. Once there is a supply risk of key upstream materials, the market may not wait until the production line really stops, and funds will first discount this "certainty premium". This is the most dangerous part of the WF ₆₆ line: it may not immediately lead to the interruption of supply at the physical level, but it is enough to become a negative narrative that ignites the foam of AI overvaluation. Of particular note is that around June 9th, the US reportedly requested China to resume exports of key materials to Japan. Strictly speaking, tungsten is not a rare earth in a narrow sense, but at the trade level, they all point to the same issue: the key material checkpoint is upgrading from a simple trade friction to affecting semiconductors AI、 Systematic variables in the automotive, military, and high-end manufacturing supply chains. This indicates that the situation is no longer just ordinary industry news, but has begun to enter the macro market pricing framework. By combining these two things, the logic becomes clear: The potential default of WF ₆ provides a highly persuasive negative narrative for the high valuation of AI; The Bank of Japan's interest rate hike, yen volatility, FOMC, and option expiration have provided the market with real funding powder. The time window from June 15th to 19th has extremely high information density: The decision of the Bank of Japan, the press conference of Vice Governor Uchida, the FOMC meeting, and the debut of Walsh were followed by monthly option expiration and liquidity disturbances before and after the "Four Witch Days". More precisely, due to the market closure around June 19th, some options and position adjustment pressures may be released earlier. This will make June 16th to 18th an extremely sensitive time window. At that time, the market will not only have to digest the Bank of Japan's interest rate hike and communication, but also simultaneously evaluate the Federal Reserve's path, US dollar interest rates, Japanese yen financing costs, AI supply chain risks, and option market position rebalancing. Such events alone may not be sufficient to cause a systemic impact. The Bank of Japan's addition of 25bp may have already been partially priced by the market; WF ₆ supply risk may not immediately be transmitted to AI chip shutdown; If FOMC does not exceed expectations, theoretically it can also land smoothly; The expiration of options itself is not a natural disadvantage. But what the market truly fears is never a single event, but the resonance of multiple variables in crowded trading. If the Japanese yen appreciates rapidly after the Bank of Japan raises interest rates, carry trade will be forced to close positions; If WF risk continues to ferment, the market begins to doubt the certainty of AI chip delivery; If the FOMC releases another hawkish signal, the US dollar interest rate will once again suppress risky assets; If the dealer gamma structure amplifies unilateral volatility near the expiration of the option, then these lines may merge from "independent risks" into the same selling reason. That is: Financing costs are rising, supply chain certainty is decreasing, and AI valuations are overcrowded. This is also why Japan may once again become the fuse for global risk assets. On August 5, 2024, it was essentially a sudden reversal in yen financing transactions, triggering deleveraging of high beta assets worldwide. And this time, if the narrative of AI supply chain is disrupted, it will not only be a financial leverage issue, but also further impact the core valuation pillar of the US stock market in the past two years. Of course, this does not necessarily mean that the market will explode. If the Bank of Japan communicates properly, it can not only raise interest rates to stabilize the exchange rate, but also avoid releasing consecutive tough tightening signals; If the FOMC does not create new interest rate shocks; If the WF ₆ supply risk has not escalated to company announcements, customer letters, or downstream wafer fab confirmations; If there is no unilateral liquidity squeeze near the expiration of the option, then this round of risk may still be dismantled. But what can be confirmed is that the left tail risk in the current market has significantly increased. Bank of Japan is the financial fuse, WF ₆ is the industry narrative fuse, and FOMC and option expiration are the volatility amplifiers. The fuse and gunpowder are already on the table, and what truly determines whether this wave will explode, whether it will be more violent than August 2024, is whether there will be the power to dismantle the mines in a timely manner. If not, the market is likely to combine "deleveraging yen financing transactions" and "AI supply chain uncertainty" into the same trading narrative. At that time, it will not only be Japanese interest rates or semiconductor materials that will be revalued, but the entire Nvidia universe chain, as well as the US stock valuation system built on AI certainty over the past two years. Bomb Disposal Personnel Roster: Uchida himself (the author of the original phrase "Don't raise interest rates when the market is unstable", with a probability of 75-80% according to the script) Walsh (CPI wrote his dovish lines for him) Probability of each script: Dumb Fire (50-55%): Dove faction landing, Walsh staying put, Japanese yen fluctuating between 159-163, tungsten hexafluoride theme slowly digested in Q3 Intervention script (about 20%): The depreciation of the Japanese yen above 163 forced the Bank of Japan to intervene, hitting the thin liquidity of FOMC+Four Witch Days, and causing a sharp rise of 3-5 yuan in the yen - aftershocks in the Nikkei -3~5%, Nasdaq -2~3%, BTC-5~10% levels Hawkish surprises (10-12%): Uchida's hawkish remarks do not rule out the possibility of further interest rate hikes in October or FOMC votes leaning towards hawks Complete detonation · 8.5 replica (≤ 8%): Need for the Middle East situation to escalate and land simultaneously Reverse inflation (10-15%): Double Dove+Four Wizards Post day Volatility Compression+SpaceX Listing Surplus Temperature, and foam Blows Another Stage - This tail is most painful for those eager to short, and liquidation is only postponed to the meeting place where stocks bottomed out from early July to the end of August