The Japanese yen declined in the Asian market on Thursday against a basket of major and minor currencies, extending its losses for the third consecutive session against the US dollar, following the release of shock data from the world’s fourth-largest economy that showed a sharp decline in real wages in November.

These data contributed to easing inflationary pressures on Japanese central bank policymakers, giving the Bank of Japan more time to remain cautious and reassess the future path of interest rates before taking any additional steps toward monetary tightening.

Price Overview

• Japanese yen exchange rate today: The dollar rose against the yen by 0.15% to 156.95 yen, from the opening level of 156.74 yen, recording a low at 156.65 yen.

• The yen ended Wednesday’s session down 0.1% against the dollar, marking its second consecutive daily loss, following the release of strong data on US services sector activity.

US Dollar

The US dollar index rose by 0.1% on Thursday, extending its gains for the third straight session and approaching a four-week high, reflecting continued strength of the US currency against a basket of global currencies.

US services sector activity rebounded unexpectedly in December, signaling that the US economy ended 2025 on a solid footing, which may give the Federal Reserve more time to assess its next move toward further interest rate cuts.

Japanese Wages

Japan’s Ministry of Health, Labour and Welfare said on Thursday that total monthly cash earnings and a separate measure of full-time wages rose by 0.5% year-on-year in November, the slowest pace since December 2021, and well below market expectations of a 2.3% increase. Wages had risen by 2.5% in October, revised down from an initial 2.6%.

The sharp decline in Japanese wage growth paves the way for further easing in price pressures and a slowdown in inflation momentum in the coming period. A sustained easing of inflationary pressures on Bank of Japan policymakers significantly reduces the likelihood of additional interest rate hikes in Japan this year.

Japanese Interest Rates

• Following the data, market pricing for a 25-basis-point interest rate hike by the Bank of Japan at its January meeting fell from 20% to 5%.

• To reprice these expectations, investors are awaiting further data on inflation and unemployment levels in Japan, in addition to monitoring comments from Bank of Japan officials.

When US forces launched a strike on the Venezuelan capital and ousted President Nicolas Maduro on Saturday, one of US President Donald Trump’s rhetorical foreign policy threats suddenly turned into tangible reality.

In the days that followed, Trump’s repeated musings about other items on his foreign policy wish list gained fresh momentum — most notably his long-standing desire for the United States to take control of Greenland, the vast, self-governing Arctic territory under Danish sovereignty.

Following this bold display of US military power in Venezuela, those statements have taken on a different tone, straining relations between Washington and one of its NATO allies.

Danish Prime Minister Mette Frederiksen reiterated on Monday that she had “made the Kingdom of Denmark’s position absolutely clear, and Greenland has repeatedly said it does not want to be part of the United States.”

She even warned that such a move could lead to the collapse of NATO.

So why does Trump continue to focus on this remote, sparsely populated island, and why is it causing tensions with Europe?

What is Greenland?

Greenland is a resource-rich island covering 836,000 square miles (2.16 million square kilometers). It is a former Danish colony and is now a self-governing territory within the Kingdom of Denmark, located in the Arctic region.

Greenland is the least densely populated country in the world, with ice covering most of its landmass. Its population stands at around 56,000 people, who travel between towns by boat, helicopter, and aircraft, with settlements largely concentrated along the west coast. The capital, Nuuk, reflects the character of these towns, with brightly colored houses clustered between a rugged coastline and inland mountains.

Outside urban areas, Greenland is largely wilderness, with ice covering 81% of its territory. Around 90% of the population is of Inuit descent, and the economy has long depended on fishing.

Why is it strategically important?

Three interconnected factors — amplified by the climate crisis — make Greenland strategically significant: its geopolitical location, its natural resources, and the potential opening of northern shipping routes around the island.

Greenland lies between the United States and Europe and controls what is known as the GIUK Gap — a maritime corridor between Greenland, Iceland, and the United Kingdom that connects the Arctic to the Atlantic Ocean. This gives the island a pivotal role in controlling access to the North Atlantic, both commercially and militarily.

Its abundant natural resources, including oil, gas, and rare earth minerals, further enhance its strategic importance, particularly as China leverages its dominance in rare earth production to exert pressure on the United States. These minerals are essential to the global economy, used in everything from electric vehicles and wind turbines to military equipment.

Melting Arctic ice due to climate change could make Greenland’s mineral wealth more accessible, although extraction would likely remain extremely challenging due to rugged terrain, limited infrastructure, and existing environmental regulations.

The retreat of ice is also making northern shipping routes navigable for longer periods each year, with significant commercial and security implications.

Despite this, Trump has downplayed Greenland’s natural resources, telling reporters last month: “We need Greenland for national security, not for the minerals.”

However, his former national security adviser Mike Waltz suggested in January 2024 that Trump’s focus was indeed on resources, telling Fox News that the administration’s interest in Greenland was about “critical minerals” and “natural resources.”

All of this means that the United States, China, and Russia are now competing more openly over the Arctic as its geography changes due to climate pressures.

More than a quarter of Russia’s landmass lies within the Arctic Circle, making the region vital to Moscow’s defense strategy. In recent years, China has also entered the competition, declaring itself a “near-Arctic state” in 2018 and pursuing the goal of a “Polar Silk Road” for Arctic shipping.

What does Venezuela have to do with it?

The day after US forces stormed Maduro’s residence and removed him, Trump again stressed that the United States needs Greenland “from a national security perspective.”

Speaking to reporters aboard Air Force One on Sunday — despite initially saying he did not want to discuss the issue — Trump said: “Greenland is filled with Russian and Chinese ships everywhere. We need Greenland from a national security standpoint, and Denmark won’t be able to do that.”

As tensions escalated on Tuesday, the White House said it was “discussing a range of options” to acquire Greenland and did not rule out the use of the US military.

However, Secretary of State Marco Rubio played down the likelihood of near-term military action, telling lawmakers this week that the Trump administration is considering the option of purchasing Greenland, according to sources familiar with the discussions.

What has Trump said before?

Trump first inquired about the possibility of buying Greenland during his first term. Despite being told by the island’s authorities that “Greenland is not for sale,” he revived the idea in December 2024, writing in a social media post: “For purposes of national security and freedom throughout the world, the United States of America feels that the ownership and control of Greenland is an absolute necessity.”

Vice President JD Vance visited the island in March 2025, stating that “US policy” was to seek changes in Denmark’s leadership over Greenland, while acknowledging that Greenlanders themselves must decide their future.

Opinion polls in Greenland show clear opposition to joining the United States.

What is the historical US presence there?

The United States already has a longstanding security foothold in Greenland dating back to the Cold War, when the island’s proximity to Russia made it a key monitoring location in the event of a missile attack.

Washington signed a defense agreement with Denmark in 1951, allowing it to station forces at a military base that remains in use today, albeit on a much smaller scale.

Before that, the United States made several attempts to purchase Greenland, most recently in 1946.

What does this mean for NATO?

If the United States were to use military force to seize Greenland — something Trump has explicitly refused to rule out — it could fracture NATO.

Frederiksen said on Monday: “If the United States chooses to attack another NATO member militarily, everything stops, including NATO itself and the security that has been provided since the end of World War II.”

On Tuesday, leaders of major European powers expressed their support for Denmark and Greenland, stressing that Arctic security must be safeguarded collectively with NATO allies, including the United States.

In a joint statement, leaders from France, Germany, Italy, Poland, Spain, the United Kingdom, and Denmark said: “Greenland belongs to its people. Decisions concerning Denmark and Greenland can only be taken by Denmark and Greenland themselves.”

The statement added: “NATO has made it clear that the Arctic is a priority, and European allies are strengthening their efforts.”

What do Greenlanders think?

Trump’s repeated remarks about Greenland strike at the heart of the territory’s domestic politics, long shaped by Denmark’s colonial legacy.

Greenland was formally integrated into Denmark in 1953 amid the global wave of decolonization after World War II. It gained home rule in 1979 and expanded self-government in 2009, although foreign policy, defense, security, and monetary policy remain under Danish control.

Greenlandic politicians have pledged to take steps toward independence but have not set a clear timeline. While not all Greenlanders want independence from Denmark, few want to replace Danish leadership with American rule.

Greenland’s prime minister, Jens-Frederik Nielsen, described US rhetoric as “completely unacceptable.”

He said in a statement: “When the US president talks about a ‘need for Greenland’ and links us to Venezuela and military intervention, that is not only wrong but deeply disrespectful.”

He added: “No more annexation fantasies. We are open to dialogue. We are open to discussion. But it must take place through the proper channels and with respect for international law. Greenland is our home and our territory, and it will remain so.”

By contrast, Kuno Fencker, a lawmaker from the opposition Naleraq party, which is more favorably inclined toward the United States, said some of Trump’s comments “were received with a fair amount of welcome.”

Speaking to CNN, he added: “If he says that Greenland has the right to self-determination or to join the United States, that is a big offer from a US president.”

Most US stock indexes rose at the start of Wednesday’s session, with the S&P 500 hitting record levels, while the Dow Jones Industrial Average later turned slightly lower.

This comes as markets assess US labor market data, after today’s ADP report showed the US private sector added 41,000 jobs in December, below analysts’ expectations of 48,000.

Investors’ attention is now focused on the more comprehensive US nonfarm payrolls report due on Friday, with expectations that the US economy added 73,000 new jobs in December.

In trading, the Dow Jones Industrial Average was down by 0.4%, or about 200 points, at 49,263 points by 15:50 GMT. The broader S&P 500 index rose by 0.1%, or around 5 points, to 6,949 points, while the Nasdaq Composite climbed by 0.4%, or 96 points, to 23,643 points.

Nickel prices jumped by more than 10% on the London Metal Exchange during Tuesday’s session, recording their biggest gain in more than three years, as rising investor interest in China fueled a broad rally across metals markets.

The battery and stainless-steel metal climbed to $18,785 per metric ton on the London Metal Exchange, extending a strong upward trend that has lifted prices by around 30% since mid-December.

Despite a substantial oversupply in the nickel market, growing risks to production in Indonesia, the world’s largest supplier, helped improve sentiment, alongside broad-based investment inflows into China’s domestic metals markets.

This shift marks a sharp reversal for a metal that had long struggled under the weight of Indonesian overproduction and weaker-than-expected demand from electric vehicle batteries. It also signals a revival in LME nickel trading after volumes fell sharply following the historic short squeeze crisis that hit the market in 2022.

Trading dynamics show that Chinese investors played a pivotal role in pushing metals prices higher this week, including nickel, copper, and tin. Prices on the London exchange surged during high-volume Asian trading hours, before extending gains during the Shanghai Futures Exchange’s overnight session.

Base metals have started 2026 on strong footing, with the LMEX index, which tracks six major metals, rising to its highest level since March 2022, when the sector last peaked. Copper has gained more than 20% since late November, while aluminum has climbed to its highest level since April 2022.

Copper extended its rally this week after breaking above $13,000 per ton for the first time, as investors bet on tightening supply and improving risk appetite across broader financial markets. Three-month copper contracts on the London Metal Exchange rose as much as 3.1% on Tuesday to hit a fresh record of $13,387.50 per ton, surpassing the previous day’s high.

Although demand has slowed in recent months, particularly in China, the world’s largest consumer, buyers there are now engaged in fierce competition to secure supplies as copper continues to flow into the United States. Expectations that the administration of US President Donald Trump could impose tariffs on refined copper have prompted large stock withdrawals into the US market, potentially leaving the rest of the world facing tighter supply at a time when producers are struggling to raise output.

President Trump had previously boosted copper shipments to the United States during the first half of last year, before exempting refined copper from tariffs, which temporarily halted these flows. However, trade has picked up again in recent months as tariff policies have been reconsidered, pushing US domestic prices back into premium territory. US copper imports rose in December to their highest level since July.

By the close of trading on Tuesday, copper prices on the London Metal Exchange rose 1.9% to settle at $13,238 per ton by 5:57 pm London time.

Nickel closed up 9% at $18,524 per ton, while tin ended the session with a gain of 4.9%.