The Japan Jibun Bank Manufacturing PMI for December reached 49.7, surpassing the expected 48.8. This shows a positive trend in the manufacturing sector. Additionally, USD/CAD remained steady at around 1.3770, while the Japanese Yen gained value due to expectations of BOJ rate hikes. Meanwhile, WTI crude oil prices fell below $56.50, partly due to speculation about a possible peace deal between Russia and Ukraine.

Gold And Currency Performance

Moreover, Gold prices increased amid hopes for US Fed rate cuts. The GBP/USD pair stayed above the mid-1.3300s, while NZD/USD dropped below 0.5800 due to negative data from China. In top picks, EUR/USD held its gains near 1.1750, and GBP/USD remained stable ahead of key economic data. Gold continued to trade above $4,300, supported by rate cut expectations, while cryptocurrencies like Aster and Ethena experienced declines. An NFP preview suggested a complex data release that could impact monetary policy decisions. For brokers in 2025, leading currency dealing firms were recommended, especially those with low spreads and trading opportunities involving EUR/USD. Benefits for traders included educational resources and cashback offers. A legal disclaimer emphasized the importance of thorough research before any financial commitments, as potential risks and losses are the investor’s responsibility. Japan’s manufacturing sector shows surprising strength as we near the end of 2025, with the latest PMI data exceeding expectations. A reading of 49.7 is the best we’ve had in nearly two years, a significant improvement from the sub-48 levels seen throughout much of 2024. This resilience suggests the Japanese economy may be on the rise, supporting a stronger yen. The key focus for derivative traders is the growing differences between the Bank of Japan (BOJ) and the US Federal Reserve. The BOJ’s historic move to end negative interest rates in March 2024 has set the stage for today’s situation, where markets expect more rate hikes. This contrasts sharply with the Fed’s ongoing rate cuts, a major shift from last year’s peak rates of over 5%.

Market And Economic Trends

This policy split puts downward pressure on the USD/JPY currency pair. We have already seen the pair retreat significantly from the highs above 150 in 2024. Options markets now predict a shift toward the 130 level in the first quarter of 2026, making it wise for traders to position for further yen strength against the dollar. However, the global economic picture is complex, indicating rising volatility in the coming weeks. Gold holding near $4,300 an ounce suggests significant flight to safety or ongoing inflation fears, greatly surpassing the previous records set in 2024. In contrast, WTI crude oil trading below $56.50 a barrel points to a global slowdown and weak industrial demand. These mixed signals make broad market bets risky, but they also create opportunities for relative value trades. Weakness in Chinese data is dragging down currencies like the New Zealand dollar, opening up possibilities for pair trades against stronger economies. Strategies that capitalize on volatility, such as straddles on major equity indices, should be considered as the market processes these conflicting economic signals. Create your live VT Markets account and start trading now.

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