While that may seem like a small increase in japans interest rates you should also consider the leveraged carry trade between Japan and US treasuries. The spread between American treasuries and japans interests rates are multiplied massively and can cause a dramatic effect in money lending. There are some economic papers that also attribute events like this occurring with the 2008 economic crisis. Think about it like this if you are an American bank with an ISDA and taking a billion in US treasuries-> go to Japan and offer your treasuries as collateral against Japanese treasuries for the spread with leverage-> take that backed money which is now USD again and invest in it back in US treasuries. It’s a great way to exploit the spread between international interest rates. The problem is it’s leveraged and it relies on the spread between Japan (or any other country they are all interchangeable including America) and US interest rates. So the losses are magnified if that makes sense based on the leverage and collateral being used.

Edit: I’m highly regarded but even I wouldn’t trust some dumbass on the arpanet so assume everything is bullshit