Trump Inauguration and BoJ Meeting to Shake the Markets! A Crucial Week Begins

Trump Inauguration and BoJ Meeting to Shake the Markets! A Crucial Week Begins

Week of January 20, 2025: Key Events

This week, the inauguration of President Trump and the BoJ Monetary Policy Meeting scheduled for Friday, January 24 are set to dominate the financial markets. Below, we outline the key details of these events, market highlights, and investment strategies.

Trump Inauguration at the Start of the Week

January 20 (Monday), Japan Time: Early January 21

• Inauguration Schedule:
  1. 1:30 AM: Inauguration ceremony begins
  2. 2:00 AM: Oath of office
  3. 2:20 AM: Inaugural address

Market Focus:

1. Policy Direction Clarification:
   • Key focus areas include tax cuts, fiscal stimulus, and deregulation.
   • Infrastructure investment and energy deregulation could boost related stocks.
2. U.S. Dollar Trends:
   • Growth expectations could drive dollar appreciation, though profit-taking around the inauguration is also possible.
   • Inflation expectations from fiscal stimulus might fuel Fed rate hike forecasts.
3. Cryptocurrencies:
   • Positive Trump administration sentiment toward Bitcoin and crypto could push prices even higher.
   • Bitcoin recently surpassed $100,000, with sustained momentum being a critical focus.
4. Gold (XAU/USD):
   • Risk-on sentiment may lead to a temporary correction in gold prices.
   • Stronger inflation fears could trigger renewed buying.

BoJ Monetary Policy Meeting Later in the Week

January 24 (Friday):

• Market Expectations: BoJ rate hike probability is priced in at over 80%.
• Key Considerations:
  1. Rate Hike Decision: A hike could drive short-term yen appreciation, while no change might reignite yen weakness.
  2. Outlook for Additional Hikes: Future rate hike prospects, especially ahead of Japan’s spring wage negotiations, will be critical.

Market Outlook by Sector

1. Forex Market

• USD/JPY: Volatility is expected to expand, influenced by Trump policies and the BoJ meeting outcome. A range between 155 and 158 yen is likely.
• EUR/USD: Continued European economic weakness could pressure the euro, with a potential drop below 1.02 USD.

2. Cryptocurrency Market

• Bitcoin: After breaking $100,000, the next target is $120,000. Consider buying on dips during corrections.

3. Equity Market

• Infrastructure Stocks: Anticipation of Trump policies may drive gains, particularly in construction and energy sectors.
• Financial Stocks: Expectations of deregulation could keep financial stocks on an upward trajectory.

4. Commodities Market

• Gold (XAU/USD): Prepare for a potential correction but watch for opportunities to buy amid renewed inflation concerns.

Strategies and Risk Management

1. Short-Term Strategies:
   • Assess policy details following Trump’s inaugural address to decide whether to continue buying the dollar or adjust.
   • Target entry points during corrections ahead of the BoJ meeting, considering yen appreciation risks.
2. Medium-to-Long-Term Strategies:
   • Ride Bitcoin’s bullish trend, and actively consider buying more during corrections.
   • Focus on short-term trading for gold while monitoring inflation-related trends.
3. Risk Hedging:
   • Set strict stop-loss orders to guard against unexpected Trump administration policy announcements that could disrupt markets.
   • Be prepared for sharp yen movements around the BoJ meeting.

Summary

This week’s markets will be heavily influenced by Trump’s inauguration and the BoJ Monetary Policy Meeting, both significant events. With high volatility expected, swift decision-making and a flexible trading strategy will be essential.

By staying alert to market developments, we aim to maximize profits while mitigating risks.

P.S. Bitcoin is once again in the spotlight as the Trump administration prepares to take office. Swift decision-making will be critical to capitalizing on short-term opportunities.