Japan’s industrial production increased by 1.4% in October, surprising many who expected a 0.6% decline. This shows that the manufacturing sector is recovering despite ongoing economic challenges. The Japanese yen remains stable, even with higher consumer price index (CPI) figures from Tokyo. Conversely, the Australian dollar is gaining strength due to rising inflation. This reduces the chances of easing measures from the Reserve Bank of Australia (RBA).

The People’s Bank Of China Update

The People’s Bank of China set the USD/CNY reference rate slightly higher at 7.0789. The New Zealand dollar remains near its monthly high, thanks to a strong position from the Reserve Bank of New Zealand (RBNZ). In the foreign exchange market, the GBP/USD is rising around 1.3250 amid expectations of rate cuts from the Federal Reserve. The EUR/USD is steady at around 1.1600, with trading activity low due to the holiday season. Gold prices are nearing $4,200, boosted by favorable market trends and expectations of a dovish Federal Reserve. Meanwhile, a hack at the Upbit crypto exchange led to a $37 million loss from a Solana wallet, affecting the cryptocurrency market. With the Thanksgiving holiday prompting reflections on the UK budget, analysts are watching upcoming economic indicators to forecast market trends.

Japan’s Industrial Production And Yen Opportunity

Japan’s surprising 1.4% rise in industrial production signals economic strength that the market has not fully recognized. The yen’s slow reaction presents an opportunity to invest as it may catch up. Historically, strong domestic data leads to currency strength after an initial delay, as seen during the economic recovery phase in 2024. The widely held belief that the US Federal Reserve will soon cut rates is influencing the market and putting pressure on the US dollar. This perspective has gained traction following US inflation data for October 2025, which dropped to 2.8%, along with a weaker-than-expected jobs report. As a result, strategies that bet against the dollar, such as call options on GBP/USD or EUR/USD, are becoming more appealing. Expectations of lower US interest rates are driving gold prices towards the $4,200 mark. Gold traditionally performs well when the Fed takes a more dovish approach, as observed during the easing cycles of the early 2020s. Investors might consider call options on gold or gold futures to take advantage of this bullish momentum as the dollar weakens. In contrast, Australia and New Zealand’s central banks remain firm due to high inflation. Australia’s latest quarterly inflation rate stands at 4.5%, well above the Reserve Bank of Australia’s target. This makes the Australian and New Zealand dollars attractive, especially against currencies from central banks taking a dovish stance like the US dollar. The recent $37 million Solana hack at the Upbit exchange serves as a warning for the cryptocurrency market. This incident puts downward pressure on Solana and could be taken advantage of with put options for those expecting further declines. It reminds us that individual assets can carry unique risks that must be managed, even in a generally positive market. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now