Markets And Global Trends

Ueda vs. Takaichi

The "Nagoya Surprise"
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Bank of Japan Governor Kazuo Ueda delivered his clearest signal yet that an interest rate hike is imminent, potentially as early as the December 18–19 meeting. Speaking to business leaders in Nagoya, Ueda shifted from vague data-dependency to explicitly stating the board will "weigh the pros and cons" of a hike, effectively putting a December move on the table.



The market reaction was textbook "hawkish shock": The Yen surged (USD/JPY dropped), the Nikkei 225 tumbled, and JGB yields hit levels not seen since 2008.




1. The Catalyst: What Ueda Said (and What He Meant)


Ueda’s speech in Nagoya contained three critical components that shifted market sentiment:


The "Pros and Cons" Phrase: By stating the BoJ will "consider the pros and cons" of a hike this month, he removed the safety net that previously suggested they might wait for 2026 wage talks.


Dismissing US Risks: A major excuse for pausing rate hikes was uncertainty surrounding the US economy and the Trump administration’s trade policies. Ueda explicitly noted these risks are "diminishing," signalling that the BoJ no longer feels the need to wait for clarity from Washington.


Wage-Price Spiral Confidence: He cited "intensifying labour shortages" and robust corporate profits as evidence that the domestic economy can withstand higher rates.



2. Market Impact Analysis


Asset Class Reaction Today The "Why"
USD/JPY Bearish (Yen Stronger)
Dropped below 155.50 Interest rate differentials are narrowing. As the Fed prepares to cut and the BoJ prepares to hike, the "carry trade" becomes less attractive, forcing traders to buy back Yen.


Nikkei 225 Bearish (Stocks Down)
Fell ~1.5% to 2.0% A stronger Yen hurts the profits of Japan's export-heavy giants (Toyota, Sony). Plus, higher borrowing costs increase headwinds for domestic firms.


JGB Yields Bullish (Yields Up)
2Y & 10Y Yields hit 2008 Highs Bond traders are dumping debt in anticipation of higher rates. The 2-year yield (most sensitive to policy) broke above 1.0%, signaling a hike is fully priced in.



3. Forward Outlook: The "December Duel"
Date to Watch: December 18–19, 2025 (BoJ Policy Meeting).

Probability: Swap markets are now pricing in a ~64% chance of a hike in December, rising to 90% by January.



The Risk: If Ueda balks in December after this setup, the Yen will crash (USD/JPY could rocket back to 160), destroying BoJ credibility. He has effectively backed himself into a corner where he must deliver.

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3 weeks ago (edited) | [YT] | 2

Markets And Global Trends

⚖️ Closed NZDJPY Short – 6.3 Pips Profit

I’ve decided to close my NZDJPY short for a small 6.3 pip profit after noticing unfavourable price action developing during the session.

While my earlier bias was driven by strong demand in Japan’s 30-year bond auction and expectations of delayed BOJ tightening, the Yen carry trade is currently dominating global FX flows.

With the carry trade momentum raging, staying short Yen pairs right now isn’t wise — liquidity, positioning, and sentiment are all working against that setup.

In trading, discipline means knowing when not to fight the market.
I’ll wait for clearer signals before re-engaging with JPY crosses.

📊 You can verify the trade details here:
🔗 MyFXBook Trade Record - www.myfxbook.com/members/Abhi/markets-global-trend…

#NZDJPY #ForexTrading #YenCarryTrade #MarketsAndGlobalTrends #FXStrategy #MacroTrading #DisciplineInTrading #RiskManagement #CurrencyMarkets #TradingUpdate

2 months ago | [YT] | 3

Markets And Global Trends

📉 Short NZDJPY – Japan’s Bond Market Sends a Strong Signal

Japan’s 30-year government bond auction came in stronger than expected, with a bid-to-cover ratio of 3.41 — higher than the previous auction and above the 12-month average.

That firm demand eased market fears after the surprise win of pro-stimulus candidate Sanae Takaichi, whose policies imply higher government spending and delayed Bank of Japan rate hikes — possibly until December.

The takeaway?
Despite political uncertainty, Japan’s long-end bonds are attracting buyers, suggesting confidence in JGB stability and less pressure on yields to rise further.

For currency markets, this means JPY strength — as the immediate risk of a disorderly bond selloff fades and investors price out near-term BOJ tightening fears.

On the other hand, the New Zealand dollar remains vulnerable, following weak domestic data and global risk-off sentiment.

Together, this sets up the perfect macro environment to be short NZDJPY — a trade aligning with the BOJ’s dovish patience and New Zealand’s slowing growth momentum.

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2 months ago | [YT] | 3

Markets And Global Trends

🚨 EURAUD Short Update: +76 Pips & Major France Shock

Good news — my short EURAUD trade is closed with +76 pips in profit. But that’s not all: France’s Prime Minister Sébastien Lecornu has just resigned, validating the political-risk narrative that drove the move in the first place.

🔍 What Just Happened

After mounting pressure and threats of a no-confidence vote, Lecornu formally resigned today.

Macron’s continuity cabinet gambit has backfired dramatically, leaving a power vacuum and heightened instability in Paris.

Bond spreads — already under stress — are likely to jump further as markets price in the risk of snap elections or further government collapse.

💶 Why This Confirms the Trade

The resignation is the clearest sign yet that the political crisis is not contained — it’s escalating.

EUR weakness (especially vs AUD) in this environment is logical: the euro suffers from renewed uncertainty, while the Australian dollar gains by comparison.

The earlier +76 pips profit was driven by the same dynamics — now the headline move gives even more ammunition for a potential follow-through.

🔄 What Comes Next (My Watchlist)

A possible Jean Castex–style caretaker government or early elections — both would intensify risk aversion toward euro-zone assets.

EURAUD could retrace upward — offering a re-entry opportunity on weakness later.

Watch for moves in French 10-year spreads vs German Bunds;

Also monitor how the ECB responds — especially if contagion threatens to widen across Europe.

✅ In short:
I booked +76 pips profit in EURAUD, and Lecornu’s resignation bolsters the macro narrative. I’ll now shift attention to identifying high-probability re-entry zones and key political/fiscal catalysts in France.



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2 months ago | [YT] | 3

Markets And Global Trends

🇫🇷 Macron’s Continuity Cabinet Deepens Political Risk — Why I’m Short EURAUD

France’s political instability is once again at the forefront of Europe’s macro narrative.
President Emmanuel Macron’s decision to appoint an almost unchanged cabinet under new Prime Minister Sébastien Lecornu has triggered strong backlash — not just from opposition parties, but even from within his own centrist camp.

This “continuity cabinet” has effectively extended the same policy gridlock that brought down the last two governments. The result: rising political uncertainty, widening bond spreads, and renewed weakness in the euro.

⚠️ A Crisis of Legitimacy

The French Socialist Party, which holds a key swing vote in parliament, openly declared that Macron’s new government has “no legitimacy left.”
Opposition leaders across the spectrum — from the far-right to centre-left — are threatening no-confidence votes that could topple Lecornu’s government as early as this week.

France’s 10-year yield premium over German Bunds has already surged to 84 basis points, the highest since January.

💶 Market Implications

This widening spread means higher French borrowing costs, greater fiscal pressure, and weaker investor confidence in euro-area assets.


A stagnant French economy, a fragile coalition, and surging risk premia are the last things the European Central Bank wants to see while it’s already navigating slowing growth across the bloc.

🇦🇺 Why EURAUD Short Makes Sense

Contrast this with Australia:
The Reserve Bank of Australia (RBA) remains cautiously hawkish, with resilient domestic demand and a stronger commodity backdrop supporting the AUD.
Meanwhile, Europe faces rising political fragmentation, slowing fiscal consolidation, and declining confidence in its second-largest economy.

When political risk meets fiscal stress, the euro tends to underperform — especially against commodity-linked currencies like the Australian dollar that benefit from global growth and China’s gradual stabilisation.

📉 My View

I remain short EURAUD, expecting further downside as:

France’s government stability deteriorates,

bond spreads widen further against Germany, and

the ECB adopts a more dovish tone in response to regional weakness.

In short:
Political paralysis in Paris is eroding euro confidence, while steady fundamentals in Australia make the AUD the relative winner.

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2 months ago | [YT] | 2

Markets And Global Trends

Japan’s New Leader Sanae Takaichi: A Return to Abenomics in 2025?

Japan has officially entered a new political and economic chapter under its newly elected Prime Minister Sanae Takaichi — a well-known protégé of former Prime Minister Shinzo Abe and a strong believer in the economic philosophy of Abenomics.

Takaichi’s leadership marks a potential return to aggressive fiscal stimulus, pro-growth reforms, and expansionary monetary policy, themes that once defined Japan’s 2010s recovery phase. Her stance is clear: support the economy with fiscal spending, resist rapid monetary tightening, and sustain the stock market’s growth momentum.

Market Reaction: Yen Weakness, Nikkei Strength

When markets open for the new week, the initial reaction is likely to be volatile. Investors will price in the possibility of renewed fiscal stimulus and delayed interest rate normalisation by the Bank of Japan (BoJ).

Here’s what traders should watch for:

JPY pairs: The Japanese yen may weaken sharply as global investors anticipate higher fiscal spending and continued yield differentials against other major currencies.

Nikkei 225: Expect the Nikkei to spike, supported by expectations of liquidity inflows, fiscal incentives, and a more corporate-friendly environment.

Japanese Government Bonds (JGBs): With fiscal expansion on the horizon, bond yields could rise sharply as investors price in higher government borrowing and potential inflationary pressures.

In the short term, the markets will search for a new equilibrium after this policy shock. But over the long run, Takaichi is expected to maintain stock market momentum and pressure the BoJ to keep monetary policy accommodative.

For traders, that means opportunities may emerge to go long on JPY crosses and the Nikkei index whenever new policy announcements or stimulus plans are revealed.

The 2025 Context: A More Complicated Landscape

However, this isn’t the Japan of 2013.
In 2025, the macro environment is significantly more complex — both domestically and geopolitically.

Here’s what’s different now:

Sticky Inflation: Japan’s inflation, once elusive, is now structurally higher. Wage growth and imported energy costs have made inflation stickier, limiting how far fiscal or monetary stimulus can go without overheating the economy.

Trade and Tariff Tensions: With global trade fragmentation intensifying, tariff negotiations are again at the centre of Japan’s economic diplomacy. The possibility of renewed U.S.-Japan trade friction, especially under Trump’s second term, could weigh on Japan’s export sector.

Currency Manipulation Concerns: Trump has previously accused Japan of currency manipulation, particularly when the yen weakens too fast. If Takaichi’s policies trigger a significant yen depreciation, diplomatic pressure from Washington could quickly resurface.

Global Interest Rate Divergence: While Western central banks have already peaked on rates and are hinting at cuts, Japan’s BoJ still sits in a delicate balancing act — torn between normalising rates and supporting growth. Any push from Takaichi to delay tightening could widen yield gaps, accelerating yen weakness.

What to Watch Next

Over the coming months, Sanae Takaichi’s fiscal roadmap will be critical. Markets will look for signs of:

Large-scale infrastructure or defence spending packages

Tax incentives for corporate investment and innovation

Any policy coordination or friction with the Bank of Japan

Statements on trade, tariffs, and foreign exchange policy

Each of these could serve as trading catalysts, particularly for those monitoring JPY pairs like USDJPY, EURJPY, and GBPJPY, or Japanese equity ETFs such as EWJ and NKY futures.

Final Take

Sanae Takaichi’s rise signals more than just a political shift — it’s an ideological return to Japan’s Abenomics-era playbook of aggressive stimulus and market-driven growth.

But this time, she faces a world of sticky inflation, currency scrutiny, and shifting global power dynamics. How she navigates these forces will shape Japan’s economic trajectory — and the performance of the yen and Nikkei — for years to come.

For traders, this transition could mark a new era of volatility and opportunity in Japanese assets.


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2 months ago (edited) | [YT] | 2

Markets And Global Trends

🌍 Tariffs, Trade Wars & Market Reactions — What Should We Cover?

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7 months ago | [YT] | 2

Markets And Global Trends

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