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Friday Morning Coffee - Markets Update - 24 January 2025 - Yen Soars as BOJ Hikes Rates, Dollar Plummets Amid Trump's China Policy Shift

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Markets Update: The yen rises after the Bank of Japan's rate hike and inflation forecast updates. The Australian and New Zealand dollars gain as President Trump eases his stance on China tariffs. The dollar is heading for its worst week in more than a year.

 

Global Markets Roundup: 24 January 2025


FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!


In a tumultuous week for global markets, the yen surged following a key rate hike by the Bank of Japan, while the dollar faltered as President Trump signalled a potential shift in tariff policies towards China. This comprehensive update captures the key movements and factors influencing various financial sectors during this period.


The yen appreciated post Bank of Japan's rate hike, while the dollar declined to a one-month low following U.S. President Donald Trump's indication of a potential shift in tariff policy towards China. The BOJ increased rates by 25 basis points, an anticipated move communicated prior to the conclusion of its two-day policy meeting. After Governor Kazuo Ueda's assertion that underlying inflation growth remains "moderate" and that there is no urgency to further tighten policy, the yen rose to 154.845 per dollar USDJPY but later stabilized. The yen was last recorded at 155.19 per dollar, an increase of 0.55%. Data released on Friday indicated a 3.0% year-over-year increase in Japan's core consumer prices for December, marking the fastest annual pace in 16 months.


Japan's Nikkei 225 index closed slightly down at 39,931.98, while the Topix index fell marginally to 2,750.24. On Friday, the DAX surged above 21,460, buoyed by President Trump's comments at the World Economic Forum, which eased concerns over US-China tariffs. Hong Kong's Hang Seng index was up 1.8% in morning trading. Futures point to a steady open for Wall Street, with the S&P 500 poised for a weekly gain after hitting a record closing high on Thursday.


In currencies, investors sold the dollar after Trump's inauguration when anticipated tariff announcements did not materialize immediately. The greenback fell to a one-month low DXY and was set to decline by over 1.7% for the week. The euro EURUSD increased by 0.7% and was projected to gain approximately 2.1% for the week. Sterling GBPUSD advanced by 0.4%, poised for a 1.9% weekly rise, ending three weeks of losses. The Australian AUDUSD and New Zealand dollars NZDUSD surged, reaching five-week highs, driven by optimism over Trump's remarks. These currencies often serve as proxies for the Chinese yuan, which also strengthened to an eight-week peak USDCNY. In cryptocurrencies, Bitcoin BTCUSD rose by 2.27% to $105,499. On Thursday, Trump directed the formation of a cryptocurrency working group to propose new digital asset regulations and explore establishing a national cryptocurrency reserve, aligning with his promise to revamp U.S. crypto policy.


In commodities, spot gold rose 0.6% to $2,770.39 per ounce, with a weekly gain exceeding 2%. Earlier, prices peaked at $2,777.10, the highest since October 31, when they reached a record $2,790.15. Crude oil prices are on track for a weekly decline due to President Trump's initiatives to increase U.S. production. Brent crude increased by 0.2% to $78.47 per barrel, while West Texas Intermediate crude rose 0.3% to $74.83 per barrel early Friday.


In soft commodities, march arabica coffee surged to an all-time high this week. Conversely, March 2025 sugar hit a new contract low, reflecting its lower price range. March ICE NY cocoa closed 1.05% lower, while March ICE London cocoa dropped 1.75%. The most-active corn contract on the Chicago Board of Trade fell 0.61% to $4.87 per bushel but is up 0.47% for the week, marking its third consecutive rise. CBOT soybeans decreased by 0.96% to $10.55 per bushel, yet it has risen 2% this week, indicating a fifth straight weekly increase. Wheat declined 0.68% to $5.50 per bushel and has gained 2.1% this week, continuing its third consecutive climb.


Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.



 

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team

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