Markets started 2026 with a bang as the Japanese yen slid against the US dollar and Japan’s Nikkei 225 index edged closer to its all-time peak. Despite dramatic headlines from Venezuela and chatter about Greenland, investors haven’t flinched. Instead, risk appetite is powering both currency and stock markets higher.
📊 The US dollar recovered ground early this week, pushing USD/JPY above the 157.00 mark. Traders say seasonal inflows and soft euro data are driving the move more than any geopolitical premium. Meanwhile, Tokyo stocks are on fire: exporters are reaping the benefits of a weak yen, nudging the Nikkei 225 toward a record high.
🔍 All eyes now shift to this week’s US labor reports. Strong jobs numbers could give the dollar and US yields another boost, keeping the yen under pressure and helping Japanese shares stay hot. On the flip side, any big downside surprise in payrolls could spark a fresh rally in the yen as traders seek safe havens.
💹 From a technical standpoint, USD/JPY still looks primed for upside. Although the pair stalled just below last year’s high near 158.00, the path of least resistance remains higher. Investors will watch if the upcoming US employment data confirm the trend or trigger a pullback.
👀 Stay tuned: the Fed’s next moves and labor market surprises will be the key drivers for both the yen and Japan’s stock market in the days ahead.
Reference(s):
cgtn.com
