Forget the Fed. The Bank of Japan could deliver next week’s market shock.

While much of Wall Street remains focused on U.S. economic data and Federal Reserve commentary, the Bank of Japan's upcoming policy meeting may prove the more consequential event for global markets. The BOJ has been an outlier among major central banks, maintaining ultra-loose monetary policy even as peers tightened. Any hint that it might adjust its yield-curve control or shift away from negative interest rates could ripple across asset classes.

The mechanism matters because the yen has long served as a funding currency for carry trades, in which investors borrow cheaply in Japan and deploy capital into higher-yielding assets abroad, including U.S. equities. A surprise policy tweak could strengthen the yen and prompt some of that capital to reverse course, pressuring risk assets globally.

For investors, the takeaway is not to predict the BOJ's decision but to recognize how interconnected markets have become. Watch the yen's movement and Japanese government bond yields as signals. A quiet BOJ meeting may pass unnoticed; a hawkish surprise would not.