Markets Tossed Around by the Trump Administration – U.S. Selling and Yen Buying Intertwine

Markets Tossed Around by the Trump Administration – U.S. Selling and Yen Buying Intertwine

🧭 Today’s Market Overview

Once again, today’s market is completely a “political market.”
Rather than expectations for the Takaichi administration, it is the Trump administration’s aggressive foreign stance and tariff issues that are dominating market sentiment.

• European equities: sharply lower

• Japanese stocks, Asian stocks, and U.S. stock futures: broadly weaker

• U.S. Treasuries: sold (yields rising)

• U.S. dollar: under selling pressure

• Gold and silver: safe-haven buying, hitting record highs

👉 The market has clearly shifted into risk-off mode.

💱 FX Market Structure

The current FX market is seeing an unusual situation where
“U.S. selling” and “Japan selling” are happening at the same time.

In USD/JPY,
dollar weakness × yen weakness × yen-buying factors
are colliding simultaneously, resulting in extremely unstable price action around the 158 level.

🇯🇵 New Catalyst Accelerating Yen Buying

Today, the following comment was reported and strengthened yen buying:

Finance Minister Katayama:
“The government plans to invest over USD 330 billion in AI and semiconductor sectors.”

For the market, this signals:

• A recovery in Japan’s industrial competitiveness

• Clear commitment to a growth strategy

• A potential medium- to long-term restoration of confidence in the yen

This is being interpreted not as a simple FX intervention-related remark,
but as a structural, reform-driven reason to buy the yen.

The current yen environment is:

• Takaichi trade → yen weakness

• Trump risk → dollar selling

• Japan’s growth strategy → yen buying

Three opposing forces are clashing, making the yen extremely unstable.

🌍 Developments Around the Trump Administration

• U.S.–Europe tensions over Greenland

• Tariff hints toward Europe (10% from February 1)

• Scheduled discussions at the Davos meeting

• The key question:
  Is this another “TACO trade” (Threaten And Chicken Out), or the start of a real confrontation?

The market is currently responding as:

“A reminder move to signal tension toward the U.S.”

Expressed through:

• Dollar selling

• U.S. equity selling

• U.S. Treasury selling

🪙 Commodities

• Gold and silver: hitting record highs

• Supported by safe-haven demand, dollar weakness, and political instability

• Clearly reflecting fragile market psychology

📅 Today’s Data and Events

Economic Indicators

• Germany PPI

• Eurozone current account

• Germany ZEW Economic Sentiment

• UK ILO unemployment rate and jobless claims
  ※ No major U.S. economic data today

Events

• World Economic Forum (Davos) ongoing

• Attendance by the BoE Governor and Deputy Governor, Bundesbank President, SNB President, among others

• Possible headlines related to U.S. Supreme Court rulings on tariffs also need monitoring

🔎 Today’s FX Highlights (London Session)

• Dollar selling accelerated

• GBP/USD: briefly reached 1.3483

• U.S. 30-year Treasury yield: 4.91% (+7bp)

• Treasury Secretary Bessent’s comment,
  “Europe will not sell U.S. Treasuries,” ironically increased market distrust

🧠 Conclusion

Today’s market is entirely shaped by:

“The Trump administration × Japanese politics × national growth strategy × geopolitical risk.”

It is an extremely difficult trading environment.

Key characteristics:

• Headline-driven rather than fundamentals-driven

• Moves of dozens of pips within minutes

• Volatility matters more than direction

• Risk management is the top priority

This is truly:

A highly sensitive zone, close to the final phase of a political market,
where nervousness dominates every asset class.