Headlines:
- Japanese Yen rebounds amid barrage of verbal intervention and "sell the fact" trade
- Japan's finance minister offers up an oddly specific comment
- Tokyo officials intensify verbal intervention on the Japanese yen
- Nippon Ishin party leader says Takaichi is to call snap election at start of Diet session
- Trump says that the US needs Greenland for the purpose of national security
- China customs authorities say Nvidia's H200 chips are not permitted - report
- Tariffs? What tariffs? China posts record-breaking trade surplus in 2025
Markets:
- JPY leads, USD lags on the day
- European equities mixed; S&P 500 futures down 0.5%
- US 10-year yields down 1.9 bps to 4.151%
- Gold up 1.0% to $4,634.19
- WTI crude oil up 1.1% to $61.88
- Bitcoin up 0.7% to $94,750
The Japanese yen was the main focus on the session after dropping in Asia, with USD/JPY ramping up above 159.00 to its highest since July 2024 at one point.
All that before some verbal intervention from Tokyo officials, mostly as you would expect. However, included in there was an oddly specific comment by Japan finance minister Katayama. He singled out the yen decline last Friday as being not in line with fundamentals, triggering some selling in USD/JPY amid rising intervention risks.
That halted the yen rout with the pair seeing some volatile price action but ultimately now being lower by 0.3% to 158.56 with the drop earlier even touching 158.15 on the session. That as Japan prime minister Takaichi also confirms that she will be dissolving the parliament's lower house later this month and will call for a snap election in February.
As for other major currencies, there wasn't anything exciting with the dollar keeping more tepid ahead of more US data later in the day.
The other notable headline on the session was that China has banned Nvidia's H200 AI chips from entering the country, barring special circumstances. That's keeping risk trades on edge alongside Trump threatening to claim Greenland on the pretext of "national security".
US futures are sitting lower across the board with tech shares leading declines. S&P 500 futures are down 0.5% with Nasdaq futures down 0.7% currently.
Meanwhile, European equities were off to a decent start with major benchmark indices in France, Spain, and the UK all posting fresh record highs at the open. However, the momentum is slowly fizzling out now with the DAX even being down 0.4% as risk trades err on the side of caution.
The other big movers on the day are none other than precious metals once again. After catching a bid in Asia, gold and silver are holding on to gains for the most part in European morning trade. Gold is up 1.0% to $4,634 while silver is up near 5% to $91.30 on a break of the $90 mark today. The hot streak continues. 🔥
