The Japanese yen declined in Asian trading on Friday against a basket of major and minor currencies, pulling back from a two-week high against the US dollar due to corrective moves and profit-taking, in addition to a rise in the US currency ahead of the release of key US inflation data.

Despite this pullback, the Japanese yen remains on track to post its largest weekly gain in 15 months, specifically since November 2024, supported by a strong buying wave following the landslide victory of the ruling party in Japan led by current Prime Minister Sanae Takaichi.

As the focus shifts from spending toward growth, traders are betting that Takaichi’s sweeping victory puts her in a strong position to pursue more fiscally responsible policies and gives her greater ability to control downside pressure in government bonds.

Price overview

•Japanese yen exchange rate today: the dollar rose against the yen by 0.4% to 153.35 yen, from today’s opening level at 152.71 yen, and recorded a low of 152.64 yen.

The yen ended Thursday’s trading up by about 0.35% against the dollar, marking the fourth consecutive daily gain, and recorded a two-week high at 152.27 yen, supported by easing financial concerns in Japan.

US dollar

The dollar index rose on Friday by 0.1%, extending its gains for the fourth straight session, within a recovery move from two-week lows, reflecting higher levels of the US currency against a basket of global currencies.

Strong US labor market data reduced the likelihood that the Federal Reserve will cut US interest rates next March. To reprice those expectations, investors are awaiting later today the release of key US inflation data for January.

Weekly trading

Over the course of this week’s trading — which officially ends with today’s price settlement — the Japanese yen is up about 2.5% so far against the US dollar, on track for its largest weekly gain since November 2024.

Financial concerns

Takaichi’s landslide victory gave investors greater confidence in her ability to push growth-supporting fiscal policies and ease living cost pressures, while at the same time placing her in a position to use stimulus tools more responsibly.

There is little doubt that Takaichi’s expected adoption of more coherent economic policies would ease financial concerns and strengthen confidence in the overall economic path, and that stimulus measures would support deficit control and contain public debt growth.

Opinions and analysis

•Vishnu Varathan, head of macro research at Mizuho, said that such a sweeping victory gives Takaichi’s government a stronger grip to control downside paths in Japanese government bonds and the yen, within what is known as “Takaichi trades”.

•Varathan added: she can adopt a more coherent fiscal policy… she certainly has a plan with reasonable figures, which would reduce doubts surrounding her. What she needed was the political capital to implement it without having to make multiple concessions to various parties seeking more stimulus.

•Yosuke Miyairi, FX and rates strategist at Nomura, said the dollar/yen exchange rate could follow the narrowing interest rate differentials between the United States and Japan and fall toward around 150 if investors see Takaichi as more fiscally responsible.

•Harvey Bradley, co-head of global rates at Insight Investment, said that with Prime Minister Sanae Takaichi shifting from a relatively conservative fiscal stance toward more precisely targeted economic stimulus, the balance of risks may have tilted toward further tightening by the Bank of Japan.

•Bradley added that the Bank of Japan’s neutral interest rate at around 1.5% appears to be a reasonable estimate.

Japanese interest rate

•Market pricing for the probability that the Bank of Japan will raise interest rates by a quarter point at the March meeting is currently below 10%.

•To reprice those probabilities, investors are awaiting more data on inflation, unemployment, and wages in Japan.

US stock indexes declined on Thursday, driven by a renewed selloff in software and technology shares, while strong labor market data reduced expectations for interest rate cuts by the central bank.

Concerns about disruptions linked to artificial intelligence triggered sharp volatility on Wall Street during the current month, pressuring sectors including software, legal services, and wealth management, with the transportation sector emerging as the latest affected by those fears.

Despite that, at least one rate cut is still expected in June, though the probability that the Federal Reserve will keep borrowing costs unchanged has risen to nearly 40%, compared with 24.8% previously, following the release of jobs data on Wednesday, according to the CME Group’s FedWatch tool.

Additional economic data due this week could guide market movements, including the Consumer Price Index — a key measure of inflation — scheduled for release on Friday.

In trading, the Dow Jones Industrial Average fell by 1.2% (or 590 points) to 49,530 as of 18:07 GMT. The broader S&P 500 index declined by 1.2% (or 83 points) to 6,858, while the Nasdaq Composite dropped by 1.6% (or 375 points) to 22,690.

Nickel prices rose in Thursday trading for the fifth consecutive session after the world’s largest nickel mine in Indonesia received a much smaller production quota for this year, boosting supply concerns.

The three-month benchmark nickel contract on the London Metal Exchange touched $17,980 on Wednesday, its highest level since January 30.

French mining company Eramet said its PT Weda Bay Nickel project — a joint venture with China’s Tsingshan and Indonesia’s PT Antam — received an initial production quota of 12 million wet metric tons for 2026, down from 32 million wet metric tons in 2025, adding that it will apply for an upward revision of the quota.

After a prolonged period of low prices, nickel has jumped about 18.6% over the past three months and reached its highest level in more than three years on January 25, as Indonesia — the world’s largest nickel ore producer — pledged to curb supply.

Nitesh Shah, commodities strategist at WisdomTree, said Indonesia “clearly recognizes its pricing power,” noting that its control of roughly 60% of global output makes it “more influential than OPEC in the oil market.” He added that Jakarta has realized it does not need to overproduce to generate strong revenues.

Even so, the International Nickel Study Group expects a surplus of 261,000 tons this year, while LME futures positioning data showed that a single participant holds a short position in the February contract equal to between 20% and 29% of total open interest.

Other base metals were also supported by the weaker dollar, which makes US-priced commodities more attractive to holders of other currencies.

In trading, spot nickel contracts jumped 4.1% at 16:02 GMT to $17.5 thousand per ton.

Bitcoin held largely steady near the $67,000 level in Asian trading on Thursday, as investors assessed stronger-than-expected US employment data that reduced bets on a near-term interest rate cut by the Federal Reserve.

The world’s largest cryptocurrency was trading slightly higher by 0.4% at $67,102.8, but remained below the key $70,000 level, with market activity relatively calm amid declining liquidity.

Bitcoin had recently recovered from a sharp drop toward $60,000 earlier this month, but has since struggled to regain its upward momentum.

US jobs data trims easing bets… focus turns to CPI

Data released on Wednesday showed that US nonfarm payrolls increased more than expected in January, signaling continued strength in the labor market.

The unemployment rate remained near multi-month lows, while wage growth stayed firm, reinforcing expectations that the Federal Reserve will keep borrowing costs elevated for longer.

Following the jobs report, traders scaled back expectations for a near-term rate cut, with market pricing showing reduced odds of monetary easing before June. Expectations of higher rates for longer typically weigh on high-risk assets such as cryptocurrencies.

Investors are now watching weekly jobless claims data due later on Thursday for additional signals on labor market conditions.

Attention is also turning to the US Consumer Price Index report due Friday, which could offer a clearer view on inflation trends and the Fed’s policy path.

Bitcoin’s failure to break above the $70,000 level reflects cautious risk appetite and continued volatility after the recent selloff, keeping prices within a sideways range.

BlockFills halts withdrawals amid crypto market slide

Crypto liquidity provider BlockFills halted client withdrawals amid a sharp drop in digital asset prices, according to multiple media reports on Wednesday.

The Financial Times and other outlets said the move, which began last week, reflects efforts to protect clients and the firm during stressed market conditions and to restore platform liquidity.

According to the reports, clients are still able to trade spot and derivatives products under certain conditions.

BlockFills serves more than 2,000 institutional clients and handled trading volumes exceeding $60 billion in 2025, according to the Financial Times.

The decision to suspend withdrawals mirrors similar steps taken by crypto firms during previous market downturns.

Altcoin prices today

Most altcoins traded slightly higher on Thursday within narrow ranges.

Ethereum, the second-largest cryptocurrency, rose 1.1% to $1,972.92.

XRP, the third-largest digital token, gained 1.6% to $1.38.