Foreign investment in Japanese stocks has taken a significant hit, dropping from ¥124.9 billion to just ¥1 billion by January 9. This drop comes amid various shifts in currency and commodity markets. The Euro is struggling, trading close to its 200-day moving average against the US Dollar. Strong US economic data and treasury yields are putting pressure on it. The British Pound is also feeling the strain against the US Dollar, influenced by expectations about Federal Reserve interest rates.

Commodity Market Movements

Gold prices have fallen to around $4,600 due to a decrease in demand for safe-haven assets. On the other hand, Ethereum has seen gains in the market due to spot market activity and less leverage exposure. Its leverage ratio has dropped from 0.79 to 0.66. Various brokers have been evaluated for their performance in 2026, revealing a range of options for traders globally. Some brokers offer low spreads, while others focus on specific regions like Mena and Latam. Despite expanding its operations in Europe, Ripple is still facing challenges in the cryptocurrency market. It has received preliminary approval for an Electronic Money Institution license in Luxembourg. Investors should be aware of the potential risks involved in investing. It’s important to do thorough research before making any investment decisions.

US Dollar Strength

Foreign investment in Japanese stocks has remarkably collapsed, with inflows plummeting from over ¥124 billion to nearly zero in just one week. This indicates a major risk-averse move for Japan, making puts on the Nikkei 225 index an appealing strategy for the coming weeks. Looking back at late 2025, foreign funds were already hesitant, and such sharp outflows historically lead to significant market corrections. The US Dollar is strong, supported by a healthy labor market. The Federal Reserve is unlikely to cut rates anytime soon. It’s wise to focus on strategies that benefit from dollar strength, like selling call options on pairs such as EUR/USD, especially as it tests its important 200-day moving average around 1.1580. Recent US jobless claims data remains steady around 210,000, providing little reason to doubt the dollar’s momentum. This dollar strength, along with diminishing geopolitical tensions, poses challenges for gold. Buying puts on gold futures looks appealing as the metal loses its safe-haven status, and non-yielding assets generally struggle when interest rates stay high. The drop below $4,600 is a pivotal technical breakdown that suggests further declines. While some investors are diversifying into Asia, recent data from Japan indicates that this may not be a safe bet. The outflow of capital from Tokyo shows that broad Asian index exposure carries risk, and traders need to be very selective. In this context, US-based assets appear to be relatively safer for now. Create your live VT Markets account and start trading now.

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