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πŸ“ˆ Focus Shifts to Post-Stopgap Budget Developments β€” Market Sentiment Under Watch

πŸ“ˆ Focus Shifts to Post-Stopgap Budget Developments β€” Market Sentiment Under Watch

βœ… Market Overview

The U.S. House of Representatives is expected to vote on the stopgap budget bill tomorrow (6:00 a.m. Japan time on the 13th).
With Republicans holding an advantage and President Trump signaling willingness to sign,
the government shutdown is now seen as nearly certain to be lifted.

Markets have already priced in this outcome.
In New York, the Dow Jones hit another record high,
while the Nasdaq softened after reports that SoftBank sold part of its Nvidia holdings,
triggering profit-taking across AI-related stocks.

With the reopening of government operations,
key U.S. economic data releases are expected to resume gradually,
though the timing and data coverage remain unclearβ€”raising concerns about data reliability.
If the figures send mixed signals, temporary market volatility and confusion are possible.

πŸ’± FX Market Developments

πŸ”Ή USD/JPY

  • Rose to 154.91, approaching the key 155.00 level.

  • U.S. yields remain firm, sustaining yen selling.

  • Japanese officials continue to warn against excessive yen weakness,
    but there are no signs of actual intervention.

  • Prime Minister Takaichi’s comments that β€œJapan has not yet overcome deflation”
    dampened rate-hike speculation for the BOJ.

  • While a 0.25% rate hike is being floated for the January meeting,
    expectations for consecutive hikes remain limited.

➑ The environment continues to favor yen carry trades.

Pair Current Comment
USD/JPY 154.89 Yen selling continues on risk-on sentiment, 155 in sight
EUR/JPY 179.29 Hit a new all-time high
GBP/JPY 203.29 Brief dip, but resumed yen weakness

πŸ‡¬πŸ‡§ Pound Volatile on Political Uncertainty

Reports surfaced that Labour MPs are plotting to oust Prime Minister Starmer,
causing a brief wave of pound selling.
Health Secretary Wes Streeting is mentioned as a potential successor.
If political strife deepens, fiscal concerns could widen,
adding downward pressure on the pound.

Pair Current Comment
GBP/USD 1.3115 Pound soft on political uncertainty
EUR/GBP 0.8805 Euro relatively firm

🌍 Key Events Ahead

Time (JST) Event Importance
17:00 Germany Final CPI / Wholesale Prices β˜…β˜…
18:00 Germany Current Account (Sep) β˜…
21:00 U.S. MBA Mortgage Applications β˜…
23:00 Canada Building Permits β˜…β˜…
6:00 (next day) U.S. House Stopgap Budget Vote β˜…β˜…β˜…β˜… (Top Focus)

Scheduled Speakers:
ECB’s Schnabel and de Guindos,
BOE’s Pill,
U.S. Treasury Secretary Bessent,
NY Fed’s Williams,
and Fed Governor Waller.

🎯 Trading Strategy

Type Approach Comment
Short-term Sell near 154.70–155.00 Watch resistance at 155.00
Medium-term Buy dips at 153.80–154.00 Carry trade theme continues
Risk Potential for BOJ or MoF intervention Watch for sudden spikes post-announcement

🧭 Summary

  • Passage of the U.S. stopgap budget is nearly certain β†’ short-term risk-on sentiment dominates.

  • However, overbought equities and UK political risk could limit upside momentum.

  • USD/JPY’s battle at 155.00 will be the week’s key event:
    β†’ A breakout signals renewed trend higher.
    β†’ A rejection could trigger a short-term correction.

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