Core Viewpoint - The article emphasizes the importance of continuous research iteration to approach the truth, highlighting that growth comes from persistent denial and reconstruction in research [2][26]. Group 1: Research Framework and Goals - The team is undergoing a comprehensive upgrade in 2025, focusing on restructuring the research framework and systematically displaying research outcomes [2]. - The guiding principle is to provide valuable independent research results that are grounded in reality and actionable [2]. Group 2: Economic Insights - The article discusses the shift in the economic "three drivers" from manufacturing to services, indicating that as GDP per capita reaches $10,000 to $30,000 and urbanization hits 70%, service sector demand will accelerate [28]. - It notes that new consumption policies emphasize long-term strategies for domestic demand expansion rather than short-term stimuli, while also providing support for manufacturing to counter tariff impacts [29]. Group 3: Structural Reforms - The concept of "anti-involution" is presented as a new phase of supply-side structural reform, which is gaining more attention from both the government and industry, with a broader scope and stronger coordination [31].

Group 1 - The Bank of Japan (BOJ) has decided to gradually start selling its holdings of domestic exchange-traded funds (ETFs), indicating a tightening of monetary policy despite maintaining the policy interest rate at 0.5% for the fifth consecutive meeting [3][6] - Following the BOJ's announcement, the Japanese yen strengthened significantly, leading to a drop in the Nikkei index by 1.6% and causing a ripple effect across Asian markets, including declines in the Hang Seng Tech Index and South Korean stock indices [1][3][4] - Analysts suggest that the BOJ's move marks a significant step away from the ultra-loose monetary policies of the Abe administration, potentially signaling an interest rate hike in October [6][8] Group 2 - The BOJ's hawkish stance has led to expectations of a potential interest rate increase, with a survey indicating that most observers anticipate a rate hike before January next year, and market expectations of a 58% chance of a rate increase by the end of the year [6][9] - The normalization of monetary policy, including interest rate hikes and balance sheet reduction, is expected to exert upward pressure on the yen, which could lead to the unwinding of carry trade positions [8][9] - Historical data shows that past reversals of yen-funded carry trades have led to yen appreciation, declines in U.S. Treasury yields, and upward pressure on gold prices, while putting pressure on equity and commodity markets [8][9]

Core Viewpoint - The Bank of Japan's decision to gradually sell its holdings of domestic exchange-traded funds (ETFs) has led to significant market volatility, with the Nikkei index dropping 1.6% and impacting other Asian markets [3][4][6]. Group 1: Bank of Japan's Policy Changes - The Bank of Japan maintained its benchmark interest rate at 0.5%, marking the fifth consecutive meeting without changes, which was in line with market expectations [3]. - The announcement of selling domestic ETFs indicates a shift from the ultra-loose monetary policy era initiated during Abe's administration, suggesting a potential tightening of monetary policy [6]. - Analysts predict a 58% chance that the Bank of Japan will raise interest rates by the end of the year, with many expecting a rate hike before January [6][9]. Group 2: Market Reactions - Following the Bank of Japan's hawkish stance, the Japanese yen strengthened significantly, contributing to declines in equity markets across Asia [4][6]. - The dollar-yen exchange rate fell sharply, which was a major factor in the market turmoil [4]. - The Nikkei index's drop was mirrored by declines in other indices, including a 0.4% decrease in India's Nifty 50 and widespread losses in Southeast Asian markets [3]. Group 3: Economic Outlook - Despite some signs of weakness, the Japanese economy is on a path of moderate recovery, with stable trends in exports and production, and moderate growth in capital expenditure [6]. - There are concerns that trade policies may slow Japan's economic growth, but a rebound is expected thereafter [6]. - Historical data indicates that the reversal of carry trades involving the yen has occurred in the past, which could lead to further market pressures if similar conditions arise [8].