By Dow Jones Newswires Staff
Japanese stocks fell and long-term government bonds rose after U.S. and Japanese authorities signaled that they are ready to step in to support the yen. The dollar remained under broad pressure against major currencies and bitcoin pulled back only marginally from falls overnight. Meanwhile, gold powered past $5,000 a troy ounce.
U.S. stock futures were flat to a touch lower ahead of a busy week: earnings come from Microsoft, Meta Platforms, and Tesla on Wednesday, and Apple reports on Thursday. Also on Wednesday, the Federal Reserve announces its latest rate decision, as does the Bank of Canada; both are expected to hold.
The Japanese yen rebounded sharply after the Federal Reserve Bank of New York, at the direction of the Treasury Department, contacted potential trading counterparties on Friday for so-called rate checks, which can precede direct intervention in currency markets. In Japan, officials have been warning for some time about the weak yen. The currency was trading earlier at 153.93 against the dollar, compared with 155.72 late Friday in New York and 158.66 at the close of Tokyo's stock trading on Friday.
Japan's Nikkei Stock Average closed 1.8% lower; Honda Motor fell 4.4%, Nissan Motor dropped 4.2% and Panasonic Holdings slid 4.7%. The yield on the 10-year Japanese government bond fell 2 basis points to 2.235% on reduced expectations of interest-rate increases by the Bank of Japan.
Fresh tariff risks and the looming threat of a second U.S. government shutdown drive gold above $5,000 an ounce in Asian trading, while silver also hit fresh highs as the relentless rise in precious metals continued. Gold futures in New York were recently up 2.1% to $5,083.50 a troy ounce after trading above $5,090 earlier in the session. Further trade tensions after President Trump threatened 100% tariffs on Canadian goods if the country signs a trade deal with China, the potential for a U.S. government shutdown and fears of the Federal Reserve's independence spurred investors to seek safe havens.
The dollar remained under pressure after reaching a four-month low against a basket of currencies overnight and as the Japanese yen surged. "In the short term, a stronger yen means a weaker dollar, which is inflationary for the U.S.," XTB's Kathleen Brooks said in a note, which might create a headache for the Federal Reserve ahead of its rate decision on Wednesday. The DXY dollar index against a basket of major currencies was recently down 0.5% to 97.155 after reaching a low of 96.949 overnight.
The Swiss franc hit an 11-year high against the dollar and a two-month high against the euro overnight, a further sign of investors seeking out safe havens. The market could price a return to negative Swiss rates as the Swiss National Bank battles with the strong franc, ING's Chris Turner said in a note.
Bitcoin recovered a touch after hitting a five-week low overnight. It was last up 1.7% to $87,946 after hitting a low of $86,021 overnight, according to LSEG data.
On the equities front, European indexes open mixed, with banks and mining stocks gaining while technology stocks fell. The U.K. FTSE 100 gained 0.35% at the open; gold and silver miner Fresnillo climbed 4.1%, while Antofagasta and Endeavour Mining both rose around 3%. Mining stocks rose sharply in Hong Kong and China, also. Italy's FTSE MIB gained 0.2%, with Banco BPM and Mediobanca both gaining close to 1%. In Paris, the French CAC 40 slipped 0.1% as did Germany's DAX.
U.S. stock futures were flat to a touch lower. Changes in futures do not necessarily predict movements after the opening bell.
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
01-26-26 0432ET
