**Asian Market Overview** Asian stocks mostly climbed, following the trends set by Wall Street. The exception was mainland China, which lagged behind. Major currencies were stable, with the USD holding on to most of its losses from the previous night. The yen weakened slightly against the USD and other currencies, though no clear reason was identified. Japan announced new sanctions against Russia. Both Japan and the US reiterated their commitment to foreign exchange stability, stating they wouldn’t target exchange rates but might step in during excessive volatility. China’s warning to Mexico came after Mexico planned tariffs of up to 50% on many Chinese goods. Precious metals saw gains, with silver making headlines by reaching USD42. Here’s how Asia-Pacific stocks performed: Japan’s Nikkei 225 rose by 0.86%, Hong Kong’s Hang Seng increased by 1.27%, the Shanghai Composite edged up by 0.12%, and Australia’s S&P/ASX 200 climbed by 0.65%. The positive trend in most Asian stocks suggests looking into call options on indices like the Nikkei 225 to ride the upward wave. However, China’s weak performance raises concern, so we may want to hedge by buying puts on China-focused ETFs. This weakness aligns with China’s recent manufacturing PMI report, which unexpectedly fell to 49.7. **Foreign Exchange Considerations** The joint statement from Japan and the US about foreign exchange is a crucial alert for currency traders. Last autumn, the Bank of Japan stepped in when the dollar-yen rate reached 150. With the rate now testing the 162 level, the risk of a sudden move is heightened. This situation makes purchasing out-of-the-money JPY call options a smart way to guard against a sharp yen rise. Silver hitting USD42 is a significant indicator, driven by more than just a safe-haven demand. This price reflects strong industrial use, especially as solar panel production has surged over 40% year-on-year, according to the latest global energy outlook. We can use bull call spreads on silver futures to take advantage of this momentum while managing our risk. Finally, the trade dispute between China and Mexico is not just a standalone issue but part of a broader shift in supply chains that has been occurring since early 2020. This ongoing fragmentation is likely to boost volatility in certain industrial sectors and emerging market currencies. We can prepare for this by using long straddles on ETFs that track Mexican industrial exporters. Create your live VT Markets account and start trading now.

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