Global financial markets see slight rebound over the weekend, with the yen depreciation intensifying and silver reaching new highs

The Bank of Japan’s rate hike decision sparks market reassessment, with global stock markets showing a modest rally over the weekend. The three major US indices all rose, with the Nasdaq leading at 1.31%, the Dow up 0.38%, and the S&P 500 up 0.88%. European markets also moved higher, with the UK, France, and Germany indices showing mixed gains and losses ranging from 0.01% to 0.61%.

Yen Continues to Depreciate, Intervention Warnings Reemerge

Japanese Finance Minister Shunichi Suzuki stated to the media after participating in the G7 online meeting that the yen has continued to weaken despite the BOJ’s rate hike, and the Japanese government will take necessary measures to address excessive exchange rate fluctuations. USD/JPY surged 1.39%, approaching the 158.0 level, prompting high alert in Tokyo due to this sharp unilateral volatility.

Suzuki emphasized that any intervention would be based on the framework of the US-Japan joint statement signed in September, focusing on addressing speculative volatility. Although the BOJ has initiated a rate hike process (raising by 25 basis points), market expectations for subsequent policy directions remain unclear. Senior officials stated that the rate hike was driven by improvements in wages and prices, aiming to achieve the 2% inflation target in a prudent manner.

The 10-year Japanese government bond yield rose above 2%, reaching a new high since 1999, indicating that markets are re-evaluating the pace of BOJ rate hikes. Meanwhile, the US 10-year Treasury yield increased 3 basis points to 4.15%, and the 2-year yield rose to 3.492%.

Commodities Market Performs Well, Silver Breaks New Record

Driven by strong demand and supply tightness, silver prices surged, breaking through $67.0/oz this week to hit a record high. Gold closed for the second consecutive day as a doji star at $4,338.6/oz, up 0.14%. WTI crude oil rose 1.14% to $56.5 per barrel.

The VIX volatility index fell 11.57%, indicating a warming market sentiment, closely related to reduced risk of carry trades unwinding after the BOJ rate hike. Micron Technology’s strong quarterly earnings further boosted tech stocks.

US Tech Stocks Lead Gains, Consumer Demand Questioned

This Friday coincides with the expiration of options and futures for the US stock market’s four major phases, with total contracts worth $7.1 trillion expiring. Tech stocks performed strongly, with Nvidia, the best-performing Dow component, rising 3.9%, Broadcom up 3.2%, and Oracle up 6.6%. The China Golden Dragon Index rebounded 0.86%.

However, signals from the consumer side are not optimistic. Nike’s stock fell 10.5% due to poor performance in China. The December US Consumer Confidence Index rose only 1.9 points to 52.9, below economists’ forecast of 53.5. The current conditions index hit a historic low of 50.4, with consumers’ willingness to purchase big-ticket items dropping to the lowest level ever.

Divergence Among Fed Officials, Rate Cut Outlook Becomes Complex

NY Fed President Williams told CNBC that there is no urgent need for further rate adjustments. He believes the current rate cuts have put policy in a proper position, with the key being balancing inflation control and protecting the labor market. Williams emphasized that November inflation data has some technical distortions, but underlying inflation is still heading toward the 2% target.

Cleveland Fed President Mester took a more cautious stance, suggesting that after three consecutive rate cuts (totaling 75 basis points), the Fed should pause adjustments in the coming months. She opposed recent rate cut decisions, focusing more on inflation risks rather than soft employment, and advocated maintaining the target range of 3.5% to 3.75% until at least spring.

Forex Market Volatility Intensifies, US Dollar Remains Strong

The US dollar index rose 0.3% to 98.7. Besides USD/JPY approaching 158.0, EUR/USD declined 0.12%. Whether the BOJ’s normalization of monetary policy will prompt the Fed to accelerate rate cuts remains a future market focus. The Fed’s recent Reserve Management Purchase Plans (RMPs) have had a QE-like market effect, further complicating policy outlooks.

Cryptocurrency Markets Slightly Adjust

Bitcoin fell 0.34% in 24 hours to $91,150. Ethereum declined 0.03% to $2,976. In Hong Kong stocks, the Hang Seng Index futures closed at 25,843 points, up 118 points, 152 points higher than yesterday’s close.

Atlantic Side, France’s Debt Crisis Emerges

France’s 2026 budget negotiations have stalled, with the 30-year government bond yield rising to 4.525%, the highest since 2009. This development reflects a divergence in international economic policies alongside the BOJ rate hike.

Space Race Heats Up, Trump Reasserts Priorities

President Trump officially confirmed that the US will prioritize manned lunar missions by 2028 and establish a lunar base, temporarily postponing the Mars mission. This new space policy aims to surpass China’s progress in lunar exploration—Beijing plans to complete lunar landings and establish a base by 2030.

Trump also signed an executive order authorizing the deployment of nuclear reactors on the Moon and in orbit, with the goal of protecting space from weapon threats. Billionaire Elon Musk was sworn in as NASA’s 15th Administrator, overseeing the Artemis program.

Chip Export Controls Tighten, Congress Presses for AI Chip Regulation

House Foreign Affairs Committee Republican Chairman Mike McCaul proposed the “AI Regulation Act” on Friday, requiring notification to Congress for AI chip sales to hostile countries. The draft stipulates that any processor with performance equal to or exceeding Nvidia’s H200 will be subject to regulation.

Earlier this month, Trump promised to allow Nvidia to export AI chips H200 to China, which triggered backlash from Congressional Republicans, urging similar military-sell-style oversight.

ByteDance Profits Surge, Nears Meta’s Annual Level

Sources say ByteDance, TikTok’s parent company, is expected to achieve approximately $50 billion in profit in 2025, a new record. The company has already accumulated about $40 billion in net profit in the first three quarters, exceeding internal expectations. If this trajectory continues, ByteDance’s annual profit could approach Meta’s estimated $60 billion.

ByteDance has signed binding agreements to spin off TikTok’s US operations into a joint venture with US investors (including Oracle Holdings) to ensure operations and reduce Chinese control. Chinese regulators have yet to comment on the deal.

Market Data Snapshot