US CREDIT HEADLINE: FITCH AFFIRMS VERIZON AT 'A-'

source: Bloomberg Finance LP  /  MNI 

The overnight range was 156.71 - 157.57, Asia is currently trading around {USDJPY Curncy}. USD/JPY has drifted a little lower as a number of officials start jaw-boning about the one-sided nature of the move. The BOJ is in a tough spot, and they are going to need to do something significant to turn around the market's perception of a weak Yen. The standout though is how the level of the Yen is becoming important to the Takaichi government and the market is looking to use it as a barometer to assess her policies, this will be an ongoing issue going into 2026. The minimal reduction in differentials is not incentivising a market that is concerned about Japan’s Fiscal policy to start buying Yen. A test of the BOJ/MOF resolve looks inevitable at the moment as the market turns its focus toward the important 160.00 area. Technically USD/JPY remains in an uptrend, while the first support back toward the 152.50-154.50 area is intact it remains a buy on dips. In today's Asian session, we have pulled back to the first buy area thanks to this official pushback, but I suspect buyers could well start to return. First support is around 156.50-156.80 and then the more important 155.30-155.80 area.

• Bloomberg - “Finance Minister Satsuki Katayama warned speculators that Japan has a “free hand” to take bold action against currency moves that diverge from fundamentals. The yen rallied on her remarks.”  
• Options : Close significant option expiries for NY cut, based on DTCC data: 156.00($1.32b), 158.00($968m). Upcoming Close Strikes : 155.50($486m Dec 26), 157.00($889m Dec 24), 158.00($589m Dec 24)  - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 118 Points
• Data/Event : Machine Tool Orders 

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

Gold and silver reached new record highs on Monday boosted by geopolitical tensions and ongoing expectations of further Fed easing. The market only has 5bp priced in for the January meeting but close to 25bp by April with another by September. There is also speculation that Fed Chair Powell’s replacement will be more dovish. Lower rates boost non-yield bearing precious metals. The 0.4% drop in the USD BBDXY was also supportive.

• Gold reached $4443.39/oz and is now at $4443.1 to be up 2.4% on the day. It is 4.7% higher in December and 69.1% in 2025. It breached resistance at $4441.3 opening $4493.7.
• Bloomberg reported that flows into gold ETFs have risen for each of the last 4 weeks. Goldman Sachs is forecasting prices to reach $4900 in 2026 with upside risks.
• Silver rose to $69.455/oz just short of psychological round number support at $70.00. It is up 2.6% to $68.93 after giving up some gains during US trading. It has jumped 21.9% this month to be up 138.3% this year.
• Large moves are likely over coming days from lighter volumes due to holidays.
• Geopolitical concerns have risen with increased tensions between the US and Venezuela as the former blockades tankers carrying sanctioned Venezuelan oil. Ukrainian attacks on Russian energy infrastructure including an empty vessel in the Mediterranean have added to worries. There are also strains between China and Japan.
• Equities were mixed with the S&P up 0.6% but Euro stoxx down 0.3%. Oil rose with Brent up 2.6% to $62.01/bbl. Copper fell 0.2%.