The Fed's rate cuts can offset some of the negative impact of the yen's rate hikes. When Japan's medium- to long-term yields rise rapidly and the global carry trade structure is forced to contract, the pressure on the entire system focuses on two points: 'compressed interest rate spreads' and 'withdrawal of financing.' The Fed's rate cuts happen to provide a buffer at these two points. A. By lowering the cost of dollar financing to maintain the US-Japan interest rate spread, the global carry trade can at least remain within an operable range, avoiding a collective breach that triggers systemic deleveraging. However, whether the spread can be maintained depends on whether the rate cut is larger than the pace of Japan's yield increase. Otherwise, it can only partially offset the impact and cannot truly maintain the spread. B. The Fed's rate cuts will bring new liquidity, allowing the market to see some new liquidity emerge under the passive deleveraging pressure caused by yen rate hikes, thereby avoiding a liquidity drain. But this is still just a 'hedge,' not a 'reversal,' because the rise in Japanese interest rates is a structural change. It will prompt Japanese pensions, life insurance funds, and domestic banks to reassess the risk-return of US assets, leading to a cyclical capital repatriation. (At least until the next zero-interest-rate period in Japan.) The Fed's rate cuts can only affect short-term financing costs and risk appetite; they cannot change the structural shifts in Japan's domestic interest rate system. In the short term, the Fed's rate cuts can stabilize sentiment, boost risk appetite, and reduce the chain reaction of forced liquidations. However, in the long term, the rise in Japan's interest rate structure will continue to exert pressure on global liquidity. This situation can only be adapted to, but the repatriation of Japanese funds does not equate to a global capital outflow. The U.S. AI sector is a structural track for concentrated global investment, so U.S. tech stocks may still attract capital from Europe, the Middle East, and domestic U.S. investors. Even if Japan tightens, other regions will still invest, and even Japanese institutions and funds might do the same. Bitget VIP, lower fees, bigger perks.