Foreign investment in Japanese stocks has reached ¥1,141.4 billion as of January 9, up from ¥124.9 billion previously. This surge shows growing interest from foreign markets in Japanese equities. The current economic climate also impacts currency pairs. The NZD/USD is close to 0.5750 due to softer rhetoric from Iran. Meanwhile, the GBP/USD is below 1.3400, as the US dollar benefits from cautious actions by the Federal Reserve.

People’s Bank of China Activity

The People’s Bank of China set the USD/CNY reference rate at 7.0078, an increase from 7.0064. The Australian dollar hovers around 0.6700, reflecting a cautious stance from the Reserve Bank of Australia. Spot market changes are influencing Ethereum, which is now above $3,300 thanks to buying from the US. Ethereum’s estimated leverage ratio has fallen from 0.79 to 0.66, indicating a move towards less leverage and a more spot-driven market. Ripple is facing pressure, as XRP continues to decline. However, Ripple has received preliminary approval for an Electronic Money Institution license from Luxembourg’s Financial Regulator. Traders can benefit from various market assessments to choose the right brokers for their needs. Options span across regions like Mena and Latam, with various trading strategies such as Forex or CFD. These guides highlight pros and cons to help with informed decisions.

Japanese Stock Market Surge

There is a significant influx of foreign money into Japanese stocks, with over ¥1.1 trillion arriving last week. This is the largest weekly inflow since the market surge in late 2024, marking a major shift in global investment trends. This follows a strong 2025 for the Nikkei 225, which gained over 18% as the Bank of Japan moved away from its negative interest rate policy. This surge in Japanese equity buying requires investors to sell dollars and purchase yen, putting downward pressure on the USD/JPY currency pair. Investors may want to prepare for a stronger yen in the coming weeks by buying puts on USD/JPY. This strategy aligns with the trend of diversifying away from the US mega-cap stocks that dominated in recent years. In contrast, the US dollar remains robust against other major currencies like the Euro and Pound Sterling. US inflation data for December 2025 came in at 3.5%, significantly above the Federal Reserve’s target, suggesting that rate cuts are unlikely soon. This environment favors continuing bearish derivative positions on EUR/USD. Gold is retreating toward $4,600 after a sharp rally driven by tensions in Iran. A similar pattern occurred during geopolitical flare-ups in 2022, where significant risk premiums were quickly priced out once tensions eased. With immediate threats appearing to lessen, selling gold futures could be a solid strategy to capture continued declines from its recent highs above $4,800. In the crypto market, there’s a clear divide in performance. Ethereum’s rise is fueled by spot market investors rather than risky leverage, suggesting a more sustainable rally and strong underlying demand. In contrast, assets like XRP show weakness. A pairs trade, buying Ethereum futures while shorting XRP futures, could effectively capitalize on this divergence. Create your live VT Markets account and start trading now.

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