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What’s happening: Japanese stocks slipped again this morning, after rebounding on Thursday, following a steep selloff over the past two trading days.
What happened: The Nikkei 225 stock indices closed lower on Tuesday and Wednesday amid uncertainty around the Bank of Japan’s interest rate decision.
Japanese shares recovered on Thursday on easing fears of hefty tariffs by the US under the Presidency of Donald Trump.
Why it matters: The Nikkei 225 shed 1.41% on Tuesday and another 0.8% on Wednesday with growing speculations of the Bank of Japan hiking its benchmark interest rate at its December meeting.
Nervousness around US President-elect Donald Trump pushing for high tariffs also exerted pressure on Japanese stocks.
The Nikkei 225 rebounded slightly on Thursday, following the nomination of Scott Bessent as US Treasury Secretary. Bessent is known for his cautious approach in policy and is widely expected to champion slower tariffs.
Bessent’s experience as a hedge fund executive and global investor as well as his strong relationship with both the Republicans and Democrats are expected to stabilise the financial markets.
The Nikkei 225 slipped again this morning, with the Japanese yen strengthening versus the US dollar. The JPY/USD forex pair added around 0.4% on news of inflation in Japan accelerating to 2.6%. Japan has been struggling with deflation or very low inflation rates for decades.
The Nikkei 225 gained 214.09 points, or 0.56%, to close at 38,349.06 on Thursday. Trading volumes remained low on Thursday, with US markets being closed due to the Thanksgiving holiday.
The Nikkei 225 shed 167.52, or 0.44%, to 38,181.54 this morning. The index is on course to end the week lower, having declined by more than 1% so far this week.
What to watch: Investors will watch the Japanese yen, which surged on Wednesday to its strongest level in more than five weeks. A strengthening yen has a positive impact on Japanese equities.
Markets will also focus on comments from policymakers about the Bank of Japan’s next interest rate move.
Context: Bitcoin is on track to delivering the best November performance in four years.
Details: Bitcoin and other cryptocurrencies have been on an uptrend following Donald Trump’s victory in the US Presidential elections.
The world’s largest crypto by market capitalisation began the week with a sharp pullback mainly on profit taking, after having reached record highs. The pullback was seen more as a hiccup than the beginning of a downtrend in cryptocurrencies.
Bitcoin climbed past the key $96,000 mark on Wednesday and continued its uptrend with escalating geopolitical tensions. The crypto is widely used as a hedge against rising geopolitical uncertainties.
Although Bitcoin prices have already more than doubled this year, there are growing speculations of the crypto king reaching $100,000 by yearend.
Bitcoin climbed 0.67% to $96,300.30 this morning. While Ripple and Cardano added more than 3.5% each, Solana and Dogecoin rose more than 1%. Ethereum bucked the trend to decline by 0.19% to $3,572.64 this morning.
What to watch: Investors will monitor the geopolitical and economic environment. Any updates from US President-elect Donald Trump and Elon Musk.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX, CAC 40 and STOXX Europe 600 up by 0.08%, 0.85%, 0.51% and 0.46%%, respectively.
Russian President Vladimir Putin threatened to strike Ukraine with nuclear-capable ballistic missiles after being hit by US-made missiles. The news sent the safe-haven US dollar slightly higher in forex trading this morning.
The Eurozone’s economic sentiment indicator (ESI) rose by 0.1 points to 95.8 in November. The figure coming in above market expectations of 95.1 lent support to the EUR/USD forex pair.
UK’s car production declined steeply by 15.3% year-on-year to 77,484 units in October, after a contraction of more than 20% in the previous month. This being the eighth consecutive month of decline sent the GBP/USD lower in forex trading this morning.
Turkey’s trade deficit narrowed to $5.91 billion in October, from $6.60 billion in the year-ago month. The figure was worse than estimates of $5.70 billion, which exerted pressure on the TRY/USD forex pair.
Russia’s gross domestic product grew by 3.2% in October, remaining flat with the previous month. The figure coming in better than market expectations of 3.1% growth sent the RUB/USD slightly higher in forex trading this morning.
Austria’s GDP and inflation rate (1200 UAE Time), Czech Republic’s GDP growth (1200 UAE Time), Spain’s retail sales (1200 UAE Time), Switzerland’s GDP growth (1200 UAE Time), Germany’s unemployment rate (1300 UAE Time), Poland’s inflation rate (1300 UAE Time), UK’s consumer credit and mortgage approvals (1330 UAE Time), Eurozone’s inflation data (1400 UAE Time), and Italy’s inflation rate (1430 UAE Time).
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