✅ Takaichi Trade Reignited: Nikkei Breaks 50,000 for the First Time in History, While Yen Weakness Persists Amid Intervention Fears
💹 Stock Market: Policy Optimism Fuels Record-Breaking Rally
At the start of the week, the Nikkei 225 surged past the historic 50,000 mark for the first time ever.
Investor sentiment was lifted by strong expectations for the Takaichi administration’s pro-growth economic policies, triggering a wave of risk appetite across the equity market.
In the FX market, USD/JPY advanced into the 153 range, symbolizing the full-fledged return of the so-called “Takaichi Trade.”
However, despite the euphoria in stocks, currency traders remained cautious.
While speculative yen selling continued, concerns over potential intervention led investors to lighten positions.
Amid a sense of “altitude fear,” the yen’s decline moderated and trading turned more subdued.
💴 FX Market: Yen Selling Persists, but Traders Stay Alert
USD/JPY remains range-bound in the low 153s, as markets weigh two opposing forces —
expectations of fiscal expansion and monetary accommodation versus heightened intervention vigilance.
Ahead of this week’s Bank of Japan policy meeting, short-term players are seen trimming positions.
Although the overall yen downtrend remains intact, momentum for further sharp depreciation has slowed.
🇺🇸 U.S.–China Dialogue & Geopolitical Crosscurrents: Relief and Risk Coexist
Globally, optimism over U.S.–China trade talks is supporting market sentiment.
Treasury Secretary Bessent described meetings with Chinese officials as “constructive,”
while President Trump stated that
“A deal with President Xi will work out well.”
His comments sparked speculation about a possible rollback of the 100% tariffs on Chinese goods,
fueling risk-on flows into both equities and the U.S. dollar.
However, Trump has maintained a hardline stance toward Russia and Canada,
and trade talks with South Korea remain strained.
Thus, the global market continues to navigate a tug-of-war between easing tensions and lingering geopolitical risks.
This week’s key focus will be whether U.S. stock gains and USD/JPY’s hold above 153 can be sustained.
📊 Key Economic Indicators & Events This Week
| Date | Indicator / Event | Market Focus |
|---|---|---|
| 🇹🇷 Turkey Employment (Sep) | Degree of labor market recovery | |
| 🇭🇰 Hong Kong Trade Balance (Sep) | Pace of export recovery to China | |
| 🇩🇪 Germany Ifo Business Climate (Oct) | Improved to 88.4 vs. forecast 88.0; muted euro reaction | |
| 🇪🇺 Eurozone M3 Money Supply | Gauge for ECB’s liquidity stance | |
| 🇲🇽 Mexico Trade Balance (Sep) | Spillover effects on Latin American FX | |
| 🇺🇸 U.S. Durable Goods Orders | Likely delayed due to government shutdown risk |
In speeches, RBA Governor Bullock is scheduled to participate in a panel discussion.
Major U.S. and European policymakers are in blackout periods, limiting market-moving remarks.
The U.S. will hold $69B in 2-year and $70B in 5-year Treasury auctions.
Additionally, the U.K. and European markets switch to winter time this week,
causing key economic releases to be delayed by one hour.
💵 Market Overview (London Session)
During early London trading, FX markets remained calm.
The Dollar Index was little changed from last Friday, moving within a tight 98.84–98.99 range.
Despite Germany’s stronger Ifo data, the euro showed little response,
reflecting a wait-and-see stance across markets after last week’s CPI-driven volatility.
📊 Major Currency Rates (London Session)
| Pair | Latest Price | Comment |
|---|---|---|
| USD/JPY | 153.01 | Yen weakness continues, but gains capped by intervention fears |
| EUR/USD | 1.1632 | Limited reaction to Ifo improvement |
| EUR/JPY | 177.72 | Yen-driven gains keep the pair near highs |
| GBP/USD | 1.3322 | Flat; lack of catalysts for direction |
✅ Summary
Optimism over the Takaichi administration’s fiscal policies fueled simultaneous stock and yen weakness.
While intervention fears tempered the FX rally, the yen-selling bias remained intact.
Progress in U.S.–China negotiations supported global risk sentiment,
but tensions with Russia and Canada remain underlying risks.
This week’s focus lies on the sustainability of USD/JPY above 153
and the durability of the U.S. equity rally,
while the Dollar Index continues to trade without clear direction as markets await the next major catalyst.
