Foreign investment in Japanese stocks was ¥1,885 billion on October 10, down from ¥2,479.9 billion previously. The Japanese yen has strengthened as investors seek safe havens, with USD/JPY nearing the important 150.00 level amid a weaker US dollar.

Euro and Pound Performance

The EUR/USD climbed above 1.1700 after a no-confidence vote in the French government. Meanwhile, the GBP/USD rose over one percent in a two-day bounce, creating a positive trend. Gold prices have been unstable, briefly dropping below $4,300 before stabilizing due to a risk-off market. Bitcoin, Ethereum, and Ripple saw declines of nearly 5%, 6%, and 7% respectively, suggesting more potential losses ahead. Solana showed signs of recovery after an intraday drop, thanks to improved sentiment in the crypto market. Both Bitcoin and Ethereum also displayed similar upward movements. The S&P 500 experienced a 2.7% drop followed by a 1.3% recovery, highlighting the market’s uncertainty. The inside day pattern indicates cautious trading and indecision despite the rebounds.

Legal Disclaimers and Market Trends

Legal disclaimers highlight the risks of investing, noting possible errors or delays in financial data. It’s essential for individuals to conduct thorough research before making investment choices. Foreign investors are stepping back from Japanese stocks, with investment decreasing by over ¥590 billion in just one week. This marks the third consecutive week of net selling, a trend not observed since late 2024’s market turbulence. Derivatives traders might consider buying put options on the Nikkei 225 index to capitalize on further declines due to this capital outflow. The Japanese yen continues to strengthen as a safe haven, driving the USD/JPY pair toward the critical 150.00 level. This area is significant since the Bank of Japan intervened here in the 2022-2024 period. This environment makes shorting USD/JPY futures or buying call options on the yen appealing. Gold is benefitting from the current uncertainty, trading close to its all-time high of $4,300 per ounce. This rally is supported by strong physical demand, with the World Gold Council reporting that central banks added another 80 tonnes to their reserves last quarter, continuing the buying trend from 2023-2024. We suggest using call options to maintain long exposure to gold while managing risk. The US stock market is showing clear signs of indecision following recent tariff-related volatility. The CBOE Volatility Index (VIX) has stayed above 22 for a week, signaling ongoing investor fear. This suggests that strategies benefiting from large price swings, like long straddles on the SPY ETF, could be wise. Weakness in the US dollar is affecting other major currency pairs, with EUR/USD now above 1.1700. This decline is tied to worries over the extended US government shutdown, recalling the economic impact of the 35-day shutdown in 2018-2019. Traders might consider buying near-term EUR/USD call options to take advantage of this upward momentum. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now