Japan’s adjusted trade balance fell from ¥62.9 billion to ¥-0.21 billion in December. This change highlights shifts in imports and exports over the month. In the currency market, the Japanese Yen declined as USD/JPY approached 159.00. At the same time, NZD/USD climbed above 0.5850 as concerns about risk eased.

Commodity Market Updates

In commodities, WTI crude oil stabilized above $60.50 due to easing geopolitical worries offsetting oversupply issues. Gold also remained above $4,800 thanks to reduced geopolitical tensions. Cryptocurrencies showed signs of recovery, with Canton, MYX Finance, and Pump.fun all reporting gains in the last 24 hours. Axie Infinity (AXS) rose by 8%, trading over $2.56 after a week of positive momentum. For traders looking at 2026, reviews highlight the best brokers for different needs, including forex trading, CFDs, and Islamic accounts. Guides focus on brokers that offer low spreads, high leverage, and platforms like MT4, particularly for regions such as MENA, LATAM, and Indonesia. Japan’s unexpected trade deficit is a key indicator, especially as USD/JPY nears 159. This isn’t a minor detail; it weakens the case for the yen. We should expect ongoing yen weakness in the coming weeks.

Trade Strategy Insights

We remember similar trends from 2022, when rising energy import costs and a weak yen led to a record annual trade deficit of nearly ¥20 trillion. With WTI crude staying above $60, we see the same pressures now affecting Japan’s import costs. The main issue is the significant difference in monetary policies. The Bank of Japan’s policy rate is close to zero, while the US Federal Reserve’s rate is above 3%. This interest rate gap makes selling the yen for dollars a profitable “carry trade.” This trend is unlikely to reverse soon, giving a consistent boost to USD/JPY. As a result, our clear strategy is to take long positions in currency pairs like USD/JPY and EUR/JPY. However, we must be cautious as the yen weakens past levels that previously prompted government intervention from 2022 to 2024. The risk of a sudden intervention by the Ministry of Finance is much higher now. To manage this risk, buying call options on USD/JPY could be a smart move. This strategy allows us to benefit from further yen weakness while limiting losses to the premium paid if the government intervenes. It gives us the potential for profit while controlling our risk amid volatility. Create your live VT Markets account and start trading now.

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