Global financial markets rebound over the weekend, yen pressure intensifies, cryptocurrencies experience volatility and adjustments

This weekend, global markets showed a divergence trend. The three major US stock indices all rose, risk aversion eased, but the yen continued to face depreciation pressure. The latest Bitcoin quote is 91.43K USD, up 1.85% in 24 hours; Ethereum is quoted at 3.14K USD, up 1.41% in 24 hours.

US Stocks Rebound and Commodity Prices Hit New Highs

The US stock market performed remarkably well, with the Dow Jones up 0.38%, the S&P 500 rising 0.88%, and the Nasdaq 100 leading with a 1.31% increase. This rebound was driven by multiple factors: the Bank of Japan announced a 25 basis point rate hike, easing the risk of carry trades being unwound; Micron Technology’s strong Q1 earnings boosted market risk appetite. The VIX fear index dropped sharply by 11.57%, reflecting a significant easing of investor nervousness.

Technology stocks led the rally, with Oracle up 6.6%, Nvidia and Broadcom rising 3.9% and 3.2% respectively, with Nvidia being the strongest component of the Dow. However, Nike fell 10.5% due to weak Chinese sales, dragging down the heavyweight stocks.

In commodities, silver prices surged past $67.0 due to increased investment demand and tight supply, hitting a record high. Gold closed as a doji for the second consecutive day, indicating market hesitation. From the exchange rate perspective, $2000 is approximately 14,500 RMB (based on the USD index at 98.7). The USD/JPY rose 1.39%, approaching 158.0, highlighting ongoing yen depreciation pressure.

Bank of Japan Rate Hike Triggers Chain Reactions

While the BOJ’s rate hike eased carry trade risks, it also pushed up long-term Japanese bond yields. The 10-year Japanese government bond yield broke above 2%, reaching a new high since 1999. This indicates market expectations of further BOJ rate hikes are building.

Japanese Finance Minister Shunichi Suzuki issued a clear warning, stating Japan will take appropriate measures to respond to excessive currency fluctuations, especially those driven by speculative, one-sided volatility. She emphasized these measures will follow the framework outlined in the US-Japan joint statement signed in September, focusing on abnormal fluctuations caused by excessive speculation.

Some analysts point out that although the current US-Japan interest rate differential remains, the appeal of the yen as a funding currency has significantly diminished for highly leveraged global macro hedge funds. Meanwhile, the Fed’s recent Reserve Management Purchases (RMPs) have had a QE-like market effect. The divergence between BOJ and Fed policy directions may become a key focus for future markets.

US Consumer Sentiment and Policy Divergence

US consumer confidence saw a slight uptick but remains subdued overall. The University of Michigan’s December final consumer sentiment index rose to 52.9, below economists’ forecast of 53.5. Notably, the current conditions index fell to a historic low of 50.4, reflecting persistent consumer pessimism about the current economic situation. Surveys show that consumer perceptions of buying big-ticket items hit a record low, indicating that economic uncertainty continues to impact spending decisions.

On the Fed’s policy stance, there are divisions among officials. New York Fed President Williams stated that the Fed does not need to rush to further adjust interest rates and that current policy is “in a very good place.” Cleveland Fed President Mester argued that the Fed should hold rates steady until spring to address rising inflation risks. These policy disagreements highlight the Fed’s ongoing dilemma in balancing inflation and employment.

In the bond market, the 10-year Treasury yield rose 3 basis points to 4.15%, and the 2-year yield increased 3.2 basis points to 3.492%. European bond markets experienced more volatility, with France’s 2026 budget negotiations breaking down, causing the 30-year government bond yield to rise to 4.525%, the highest since 2009.

Tech Giants and Policy Hotspots

ByteDance’s profitability continues to strengthen, with projections of around $50 billion in profit in 2025, approaching Meta’s estimated $60 billion this year. The company has reached a binding agreement with US investors to spin off TikTok’s US operations into a joint venture.

On the US policy front, House Republicans are calling for congressional oversight of AI chip exports at a military-approval level. The new proposal requires any chips with performance equal to or higher than Nvidia’s H200 to be reported to Congress before export to hostile countries. This directly counters the Trump administration’s promises to relax AI chip exports to China.

In space policy, the Trump administration has confirmed that lunar missions are a priority, aiming for crewed lunar landings by 2028, and establishing a lunar base by 2030. Mars missions are temporarily on hold. Newly sworn-in NASA Administrator Bill Nelson has reaffirmed the US space strategy, marking a strategic shift.

Market Data Overview

Stocks: Dow +0.38%, S&P +0.88%, Nasdaq +1.31%; Hang Seng Night Futures at 25,843 points, up 152 points; DAX 30 +0.37%, FTSE 100 +0.61%.

Commodities: Gold +0.14% to 4,338.6 USD/oz, WTI crude +1.14% to 56.5 USD/barrel, silver surpassing 67.0 USD/oz.

Forex: US Dollar Index +0.3% to 98.7, USD/JPY +1.39% approaching 158.0, EUR/USD -0.12%.

Cryptocurrencies: Bitcoin 91.43K USD (+1.85%), Ethereum 3.14K USD (+1.41%).

This week’s market theme is “divergence and adjustment” — risk assets rebounded amid policy easing, but divergence among global central banks and policy uncertainties continue to suppress investor confidence. Attention should be paid to the future movements of the BOJ and the Fed, as their interaction may dominate next week’s market trends.