Currency Movement - The yen has fallen to its weakest level in 18 months, reaching 159.05 per dollar, a decline of up to 0.6% [2][3] - The depreciation of the yen is attributed to political developments, including Prime Minister Sanae Takaichi's intention to call a snap election, reviving the "Takaichi trade" [2] Government Response - Japanese Finance Minister Satsuki Katayama expressed concerns about the yen's one-way weakening during a meeting with US Treasury Secretary Scott Bessent, who shares these concerns [3][4] - There is speculation that the meeting may lead to potential currency intervention, as both nations will maintain close communication regarding currency developments [4][5] Market Reactions - The weaker yen is expected to benefit Japan's largest exporters, contributing to a record high in the stock index [6] - However, the broader business community, represented by Keidanren, is increasingly worried about the yen's decline and calls for an adjustment towards a stronger yen [6][7] Intervention Considerations - The risk of currency intervention is being highlighted, with the yen at 160 against the dollar seen as a critical threshold for potential action [5][7] - Historical context indicates that Japanese authorities intervened in the market four times in 2024 when the yen traded around 160, suggesting a reference point for future interventions [7]

Company Highlights - Shares of Danish pharmaceutical company Novo Nordisk increased by over 7% following U.S. regulators' approval of a pill version of the weight-loss drug Wegovy, marking it as the first daily oral medication for obesity treatment [2] - Hanwha Ocean, a South Korean shipbuilder, saw its shares rise by 12.5% after President Donald Trump announced plans for the company to assist in building a new class of U.S. battleships at the Hanwha Philly shipyard [8] Industry Insights - The price of gold reached $4,523.30 per ounce, reflecting a 1.2% increase, while silver rose to $69.71 per ounce, up by 1.7%, indicating consistent gains in precious metals throughout the year [3] - Oil prices experienced a slight increase, with U.S. benchmark crude at $58.05 per barrel and Brent crude at $62.14 per barrel, despite being down approximately 19% since the beginning of 2025 due to lagging demand [3][4]

Core Insights - The Japanese yen is trading near an 11-month low against the U.S. dollar and close to a 17-month low against the Australian dollar, indicating significant depreciation in the currency market [1][7] - The Bank of Japan (BOJ) raised the policy rate by 0.25% to a three-decade high of 0.75%, but the lack of hawkish guidance on future rate hikes led to a selloff in the yen [2][6] - Governor Ueda emphasized a data-dependent approach for future monetary policy adjustments, which disappointed market expectations for clearer guidance [4][5] Currency Performance - The yen fell 1.3% against the euro, 1.4% against the U.S. dollar, and 1.5% against the Australian dollar following the BOJ's announcement [2][6] - The U.S. dollar was at 157.56 yen, slightly down by 0.1%, but remained near the previous month's high of 157.90 [6] - The euro traded at 184.51 yen, easing 0.1% but staying close to its record peak of 184.75 [6] Market Reactions - The BOJ's decision triggered a broad selloff in Japanese government bonds, with the 10-year yield surpassing 2%, the highest level since 1999 [2][6] - Analysts noted that the absence of clear guidance on future rate hikes led to disappointment in the markets, resulting in further yen selling [5][6] - The Australian dollar slightly weakened to 104.20 yen but remained close to the 104.39 yen mark reached earlier this month, supported by solid risk sentiment and interest rate differentials [7]

Currency intervention by the India's central bank has become more unpredictable, discouraging rupee traders from making speculative bets. But it also risks a deeper slump in the currency https://t.co/mFbhaeWMVx ...

Currency intervention is among the possible responses if there are excessive moves in the foreign exchange market, Japan’s Finance Minister said, as the yen continues to hover near its weakest levels since January https://t.co/9aEedcrwKj ...

Core Viewpoint - The US dollar is expected to be more sensitive to poor economic data releases than to positive ones, indicating a need to reassess its outlook in the near future [1]. Economic Data Focus - Key economic indicators to watch include labor data and Consumer Price Index (CPI) data, which may be influenced by recent shutdowns [2]. Market Positioning - Recent ADP data release led to a significant sell-off of the dollar, suggesting that market positioning has shifted, with less short interest in the dollar compared to earlier in the year [3]. - Despite being the worst-performing G10 currency year-to-date, the dollar has shown resilience in the second half of the year [3]. Currency Performance - The Norwegian krona was the best performer following the recent data release, while the dollar had been the top G10 currency performer in the previous week [4]. Outlook for the Dollar - There is a need to reassess the dollar's outlook against other currencies, particularly the euro and Japanese yen, as the latter shows signs of potential intervention from Japanese authorities [5][6]. Japanese Yen Dynamics - The new finance minister of Japan appears increasingly uncomfortable with the yen's performance, hinting at possible interest rate hikes or intervention from the Bank of Japan [6][7]. - The market is cautious about the yen's movements, particularly around the 0.55 level, indicating a significant focus on the yen's story in the current economic landscape [7].

We've been on watch here for a few days now. We get the confirmation that the US is coming and intervening in these markets. What do we know so far. So we know what Besson tweeted, right.That they finalized talks for this 20 billion swap line, which the Argentine economic team has been in DC for a few days discussing. I think they flew in Friday and he also made this, I think, a bit surprising and extraordinary step to say we we stepped into currency markets and bought pesos directly, which I think caught e ...