Japan's "hawkish" stance triggers a global asset reallocation, yen depreciation intensifies, US stocks rebound, and silver hits a historic high

The Bank of Japan suddenly raised interest rates by 25 basis points, a move that completely disrupted market equilibrium. Driven by this, global risk appetite quickly rebounded, and the VIX fear index dropped by 11.57%. Meanwhile, the USD/JPY surged by 1.39%, approaching the 158 level, and the JPY against the RMB also came under pressure. The chain reaction caused by this move has spread across major asset classes worldwide.

US Stock Market: Three Major Indices Advance Together

On Friday, due to the “Quarterly Settlement Day” (settlement of index futures, individual stock futures, and options, totaling $7.1 trillion), all three major US stock indices rose. The Dow Jones increased by 0.38%, the S&P 500 rose by 0.88%, and the Nasdaq soared by 1.31%. Chinese concept stocks also gained, with the Golden Dragon Index rebounding by 0.86%.

European stocks also performed well. The UK FTSE 100 rose by 0.61%, Germany’s DAX 30 increased by 0.37%, and France’s CAC 40 barely rose by 0.01%, but did not fall behind.

Technology stocks became the stars of this rally. Oracle gained 6.6%, Nvidia rose by 3.9%, Broadcom increased by 3.2%, with Nvidia being the strongest component stock on the Dow. However, Nike fell by 10.5% due to weak sales in China, dragging down the consumer sector.

Commodities and Bond Markets: Widespread Gains

Silver prices “took off,” soaring to a record high and breaking through $67.0, driven by both investment demand and tight supply. Gold closed for the second consecutive day with a doji star, currently at $4,338.6 per ounce, up 0.14%. Crude oil WTI rose by 1.14% to $56.5 per barrel.

Changes in the bond market reveal deeper concerns. The US 10-year Treasury yield rose by 3 basis points to 4.15%, and the 2-year Treasury yield, sensitive to interest rates, increased by 3.2 basis points to 3.492%. The Japanese 10-year government bond yield crossed the 2% mark, reaching a new high since 1999. The French 30-year bond yield rose to 4.525%, also a high since 2009.

Cryptocurrency: Slight Fluctuations in Dual Coins

Bitcoin fell by 0.24% in the past 24 hours, currently at $87,640. Ethereum’s decline was slightly smaller, down 0.19% in 24 hours, now at $29,500. Overall, the crypto market’s reaction to the global asset reallocation has been relatively moderate.

Forex and Hong Kong Stocks: Yen Under Heavy Pressure

The US dollar index rose by 0.3% to 98.7, USD/JPY increased by 1.39%, and the JPY against the RMB also depreciated. The EUR/USD slightly declined by 0.12%. In Hong Kong stocks, the Hang Seng Index night session futures closed at 25,843 points, up 118 points, with a premium of 152 points; the China Enterprises Index night session futures had a premium of 57 points.

Japanese Finance Minister Sends Strong Signal

Japanese Finance Minister Shunichi Suzuki immediately spoke after the G7 finance ministers’ meeting, announcing that Japan will take “appropriate measures” to respond to excessive exchange rate fluctuations. She emphasized: “We are concerned because there are clear signs of unilateral and violent fluctuations.” This indicates that the Japanese government may intervene in the currency market at any time. Suzuki also expressed support for the BOJ’s rate hike decision, stating it is based on wage and price trends aimed at achieving a 2% inflation target.

Fed Officials’ Attitudes Diverge

Federal Reserve Bank of New York President Williams said that there is no urgency to further adjust interest rates, as the rate cuts already implemented have put policy in a “very good state.” He emphasized the need to balance inflation decline and the employment market.

Cleveland Fed President Mester is more hawkish, believing that no rate adjustments are needed in the coming months, at least until spring. She is more concerned about inflation risks than the weakness in the employment market.

Meanwhile, US December consumer confidence slightly increased to 52.9 but remains nearly 30 points below the same period last year, with expectations for big-ticket purchases falling to a historic low.

Global Tech and Political Developments

US House Republicans are calling for congressional oversight of AI chip exports at a military-approval level, with any processors equal to or exceeding Nvidia’s H200 to be included in controls.

ByteDance is gaining momentum. According to Bloomberg, the company is expected to achieve approximately $50 billion in profit in 2025, approaching Meta’s expected profit level of $60 billion. The split plan for TikTok’s US operations has been signed into a binding agreement, awaiting Chinese regulatory approval.

Trump signed a space directive, reaffirming a focus on lunar missions, planning to land on the Moon by 2028, establish a lunar base before 2030, and temporarily shelve Mars missions. NASA’s new administrator, Bill Nelson, has been sworn in.

Market Overview

• US Stocks: Dow +0.38%, S&P +0.88%, Nasdaq +1.31%
• European Stocks: Germany DAX +0.37%, France CAC +0.01%, UK FTSE 100 +0.61%
• Bonds: US 10-year yield 4.15% (+3bp)
• Commodities: Gold $4,338.6/oz, WTI $56.5/barrel, Silver surpassing $67.0
• Forex: USD Index 98.7 (+0.3%), USD/JPY +1.39%
• Crypto: BTC 87.64K (-0.24%), ETH 2.95K (-0.19%)