🎁 What the Tigers Say | Santa Rally in Doubt? Can BOJ Tightening Shake Global

Hi Tigers, Welcome to “What the Tigers say”

This is a weekly column planned to share the great opinion from Tigers on a specific topic and today our Theme is Santa Rally & BOJ.

As markets head into December, the usual expectations of a Santa Rally are being tested by an unexpected source: the Bank of Japan. With the BOJ signaling a potential shift away from ultra-loose policy, investors are reassessing one of the longest-standing pillars of global liquidity.

For years, Japan’s easy money environment has supported yen-funded carry trades and risk appetite across U.S. equities, crypto, and growth assets. Even a modest policy shift now raises a critical question:

Is this just a temporary pause in year-end momentum — or the start of a deeper pullback driven by a global liquidity reset?

This week, we’ve selected insights from — @Isleigh @koolgal @xc__ , here’s what they have to say about the Santa Rally & BOJ.

🎁Special Notes: Whoever showed up on the “What the Tigers Say” column will receive 100 Tiger Coins and an exclusive interview invitation to honor your contribution.

1. @Isleigh 🎅 Santa Rally in Doubt? Will BOJ Policy Tightening Deepen the Market Pullback?

Key points:

Why the BOJ Suddenly Matters to U.S. Markets?

Japan's ultra-loose monetary policy has long been a global liquidity anchor. It supported carry trades, suppressed global yields, and indirectly fuelled risk appetite in U.S. equities and crypto.

Even a measured BOJ hike forces markets to reassess:

• Yen-funded carry trades

• USD strength

• Global risk premiums

Why This Feels Like a Pause, Not a Panic

Despite the headlines, this does not resemble a structural breakdown.

• Credit markets remain orderly

• Earnings expectations are largely intact

• Volatility is elevated but controlled

Base Case: Santa Rally Delayed, Not Cancelled

My base case is a narrower, later Santa Rally, not a straight-line melt-up.

Likely path:

• Choppy markets into BOJ clarity

• Selective strength, not broad participation

• Relief once macro uncertainty clears

• Risk assets recover if global liquidity fears fade

If BOJ tightening is well-telegraphed and absorbed, risk assets can stabilise quickly. If it triggers disorderly currency or yield moves, caution will remain warranted.

2. @koolgal Will Santa Claus Still Arrive? Or Is The Grinch Hiding at Bank of Japan?

Key points:

The BoJ is the last major central bank holding interest rates in negative territory. If it were to unexpectedly hike rates, even slightly, it would be a seismic shift. This move could potentially (For details, see the article) :

Drain Global Liquidity

Trigger A Correction

My Portfolio Strategy : Cash vs Cheer:

Option 1: Staying in Cash

  There is a valid argument for staying in cash and waiting for a pullback. The market is stretched thin. Volatility is creeping in and the fear of a BoJ induced correction is real.

Option 2: Fully Invested

  The AI revolution, the potential for further Fed rate cuts next year and strong corporate earnings (like those from the Magnificent 7) are powerful bullish forces. A dip might just be a blip in the grand scheme of a long term bull market.

Whether Santa brings gifts of new highs or the Grinch steals our gains, depends on whether technical patterns hold strong against a potential global liquidity squeeze.

3. @xc__ Santa Rally on Thin Ice? BOJ's Shock Hike Sparks Pullback Panic! 😱📉

Key points:

Governor Kazuo Ueda's hike aims to defend the yen and combat inflation, but it flips the script on the yen carry trade that's fueled Wall Street for years. Carry unwinds could drain capital from US assets, amplifying pullbacks in growth stocks and crypto.

December's historical +0.8% gains are in jeopardy with thin volumes amplifying swings. The BoJ hike could trigger deeper pullbacks if yen strength sparks carry trade crashes, potentially flushing $S&P 500(.SPX)$ to 6,700 and $NASDAQ(.IXIC)$ to 22,500.

My view: This pullback's short-lived – dovish Fed dots and AI earnings beats like Micron's upcoming Q1 could ignite a V-rebound to 7,100. But if BoJ sparks global unwind, deeper pain hits hard.

Global carry trades unravel as yen strengthens, but emerging Asia's glow aids resilience – $Straits Times Index(STI.SI)$ eyes 4,500 on bank strength.

Questions for you:

1. If the BOJ tightens further, do you expect a temporary volatility spike — or a sustained unwind of global carry trades?

2. In a delayed Santa Rally scenario, would you rotate into defensives, hold cash, or selectively buy dips in growth and AI names?

3. Which risk matters more right now: BOJ-driven liquidity shocks, or earnings and Fed policy offsetting the downside?

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