The Japanese yen retreated in Asian markets on Thursday against a basket of major and secondary currencies, resuming its losses that were temporarily halted yesterday against the US dollar, and moving closer once again to its lowest levels in 18 months. This decline comes under the watch of Japanese authorities, who have warned against excessive movements in the local currency in the foreign exchange market.

In the latest opinion polls on the path of Japanese monetary policy, economists said the Bank of Japan would most likely prefer to wait until July before raising the key interest rate again, with more than 75% expecting it to rise to 1% or higher by September.

Price Overview

• Japanese yen exchange rate today: The dollar rose against the yen by 0.15% to ¥158.65, from the opening price of ¥158.43, recording a low of ¥158.19.

• The yen ended Wednesday’s trading up 0.4% against the dollar, marking its first gain in the past seven days, supported by recovery buying after it earlier hit an 18-month low at ¥159.45 per dollar.

Japanese Authorities

Japan’s Finance Minister Satsuki Katayama issued another verbal warning on Wednesday, saying officials would take “appropriate action against excessive movements in the foreign exchange market without ruling out any options.”

Foreign exchange strategy analysts at OCBC said in a note that verbal warnings helped temporarily curb yen weakness, but investors are likely to test how willing the authorities are to back up their words with action.

They added that for a genuine recovery in the yen, markets need a more hawkish stance from the Bank of Japan and clarity on Japan’s fiscal and political outlook.

Early Elections

Japanese Prime Minister Sanae Takaichi intends to dissolve the House of Representatives next week and call for early parliamentary elections, to strengthen her popular mandate and secure a comfortable parliamentary majority that would ensure the passage of the 2026 fiscal year budget and the proposed economic reforms.

Karl Schamotta, Chief Market Strategist at Corpay in Toronto, said Takaichi’s plan to capitalize on her strong popularity by calling early elections translates into rising bets on a recovery in the Japanese economy, increased government spending, and higher yields.

Schamotta added that all of this is already translating in the market into downward pressure on the yen, which is naturally met by threats of intervention from the authorities.

Japanese Interest Rates

• A Reuters poll: The Bank of Japan will raise interest rates again to 1% or more by the end of September, possibly by July.

• Economists say the Bank of Japan will most likely prefer to wait until July before raising the key interest rate again, with more than 75% expecting it to rise to 1% or higher by September.

• Pricing for the probability of the Japanese central bank raising interest rates by a quarter percentage point at the January meeting remains steady below 10%.

• The Bank of Japan meets on January 22–23 to review economic developments in the country and determine the appropriate monetary tools for this sensitive phase facing the world’s fourth-largest economy.

In just about 30 minutes, the United States will officially begin negotiations that could lead to dismantling the operating system on which the Western world has been built. Oil prices have already jumped more than 1% in anticipation.

The meeting, to be held at the Eisenhower Executive Office Building at the White House, will include Vice President J.D. Vance, Secretary of State Marco Rubio, and the foreign ministers of Denmark and Greenland.

On paper, the agenda looks conventionally diplomatic:

“Arctic security”

“Strategic partnership”

“Resource development”

But the reality inside the room will be far more fragile.

President Donald Trump has been explicit aboard Air Force One, saying that anything less than US control over Greenland is “unacceptable.”

He also suggested that NATO “should lead the way to getting it for us,” framing acquisition not as a request, but as an obligation imposed on the alliance.

Regardless of what diplomats choose to call it, the pricing model of the partnership has fundamentally changed.

Volatility Tax: When Security Becomes Variable-Priced

For decades, the Atlantic alliance operated on a fixed-cost model: member states provided political alignment and access to military bases in exchange for predictable security guarantees.

That fixed price has now become floating.

The new cost of dealing with Washington includes a hedging premium against the unpredictability of US executive decision-making.

In effect, it is a volatility tax.

Article 5… at a Floating Rate

To understand the anxiety in Brussels, one must look at the security guarantee itself.

NATO was designed as a binary instrument:

Either you are protected

Or you are not

Article 5 is the cornerstone of that system.

But recent signals from Washington, particularly the refusal to rule out unilateral action on Greenland, have introduced a dangerous variable into this equation.

What was once known as “strategic patience” in European responses has evaporated entirely.

After the US military arrested Venezuelan President Nicolás Maduro on January 3, the theoretical risk of US military intervention was repriced as real and immediate.

Danish Prime Minister Mette Frederiksen was unequivocal, warning that any military move against Greenland would mean “everything stops,” a clear reference to the effective end of the alliance.

EU Defence Commissioner Andrius Kubilius echoed this concern, calling the scenario “unprecedented in NATO’s history.”

A former Danish MP summed it up bluntly: “The usual rulebook no longer works.”

From Alliance to Transaction

This reality has pushed European capitals into a purely defensive posture.

When a German defense minister is forced to speak publicly about “Europe’s options” in response to a close ally, it signals that the alliance is no longer built on implicit trust, but has become a transactional relationship based on quid pro quo.

Drilling in Ice: The Myth of Ready Wealth

The deal most likely to emerge from today’s meeting rests on two pillars:

Security spending

Natural resources

The resource component, particularly strategic minerals, is being marketed as the “silver bullet” capable of defusing tensions by granting the United States access to Greenland’s mineral wealth, especially rare earth elements.

From an industrial perspective, however, this narrative crashes headfirst into a literal ice wall.

Greenland holds vast potential reserves. The US Geological Survey estimates the island contains the world’s second-largest stock of rare earth oxides, including neodymium and dysprosium, critical for electric vehicle motors and F-35 fighter jets.

But potential is not production. To date, there is not a single active rare earth mine in Greenland.

Bad Math on Frozen Ground

The obstacle is not merely bureaucratic, but thermodynamic.

Greenland spans 2.17 million square kilometers, with 80% covered by ice. The economics of mining there are disastrous compared to countries such as Australia or Brazil.

Infrastructure gap:

No roads connecting cities

All heavy equipment must be shipped by sea or airlifted

Capital costs are 150% to 300% higher than in temperate regions

Energy problem:

No power grid

Each mine requires its own power plant

Fuel can freeze

Renewables face three months of total darkness

Ian Lange, professor of economics at the Colorado School of Mines, put it plainly: “Everyone is racing to get to production… but going to Greenland means going back to square one.”

If the European Union were to double down on investment to satisfy US demands, it would require massive state subsidies — public money used to make a structurally unprofitable project viable, not because the market needs it, but because politics demands it.

We are watching Europe offer to build a loss-making mine in exchange for buying geopolitical stability.

Access or Ownership? The Strategic Paradox

The second pillar of the deal is enhanced Arctic security. NATO Secretary General Mark Rutte has already laid the groundwork, confirming discussions on “strengthening Arctic security.”

But closer scrutiny reveals a clear paradox in the US position. If the goal is to counter Russia and China, Washington already has what it needs.

The US military operates the Pituffik Space Base (formerly Thule), a cornerstone of missile defense, and the 1951 defense agreement grants broad operational rights across the island. The demand for “ownership,” rather than “access,” suggests the motivation is not purely security, but formal control and map-based dominance.

Inheriting a Frozen Liability

Greenland is a semi-autonomous territory with a distinct culture and a social safety net funded by Denmark.

Any change in its status would shift that fiscal burden to Washington.

European Commission President Ursula von der Leyen was explicit: “Greenland belongs to its people.”

Historically, the US record in administering territories is weak, as seen in Puerto Rico and Guam.

For the American taxpayer, acquisition would mean inheriting a massive frozen liability, with returns that may not materialize for decades.

Tearing Up the 1945 Contract

The most dangerous clause in this deal is not financial, but structural.

If the United States forces a NATO ally to cede territory — through economic pressure or implicit military threat — it would violate the post-World War II security order.

The contract written by Washington in 1945 was clear:

No borders changed by force.

Allied sovereignty is inviolable.

Threatening Greenland tears up that contract.

French President Emmanuel Macron stated it plainly: “The law of the strongest cannot govern the world.”

Even the UK, traditionally the bridge between Europe and Washington, has drawn a red line. Reports indicate Prime Minister Keir Starmer told Trump: “Keep your hands off Greenland.”

The West’s Balance Sheet at Stake

As ministers sit today attempting to price a deal that was never meant to be for sale, the US side will push for:

Guaranteed mineral rights

A European-funded “security premium”

Europe may offer concessions to buy another year of sovereignty.

But the deeper reality is this: the fixed-rate mortgage of the Atlantic alliance is over.

We are now living in a floating-rate world — and volatility is high.

US stock indices declined during Wednesday’s trading as markets continued to digest a fresh round of corporate earnings reports.

Several Wall Street banks reported their quarterly results for the final quarter of 2025 on Wednesday, including Goldman Sachs, Wells Fargo, and Bank of America.

Separately, Philadelphia Fed President Anna Paulson said on Wednesday that she expects further interest rate cuts later this year, provided the economy continues to follow its expected path.

In trading, the Dow Jones Industrial Average fell by 0.5%, or about 225 points, to 48,966 as of 16:19 GMT. The broader S&P 500 declined by 0.9%, or 65 points, to 6,899, while the Nasdaq Composite dropped by 1.5%, or 352 points, to 23,355.

Copper prices hit a record high on Wednesday, supported by sustained demand from speculative funds, although some investors cautioned that elevated price levels could begin to deter industrial buyers.

The benchmark three-month copper contract on the London Metal Exchange slipped 0.1% to $13,176.50 per metric ton by 10:30 GMT, after touching a record high of $13,407 earlier in the session.

Copper prices in London are up around 44% over the past 12 months, driven by mine supply disruptions, concerns over a supply deficit this year, and metal flows into the United States ahead of potential tariff measures, which have tightened availability in other regions.

Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, said: “With all these concerns about currency debasement, financial risks, and Federal Reserve independence, demand for tangible assets has become very strong.”

He added: “In industrial metals, there is a level at which we reach a point where demand destruction begins. I don’t know exactly where that level is, or whether we’ve already reached it.”

Hansen noted that a close below $13,000 per ton could trigger a corrective downside move in the market.

Copper demand in China appeared stable, with potential stockpiling ahead of the Lunar New Year holiday, according to Hansen.

The most actively traded copper contract on the Shanghai Futures Exchange closed up 0.9% at 104,120 yuan ($14,931.88) per ton, after hitting a record high of 105,650 yuan.

Tin hits record highs

Tin prices in both Shanghai and London reached record levels, with gains of 24% in Shanghai and 30% in London since the start of January, as investors bet on rapid growth in demand for the metal used in semiconductor manufacturing, driven by the artificial intelligence boom.

The Shanghai tin contract jumped 8% to the daily price limit of 413,170 yuan, while tin on the London Metal Exchange rose 4.1% to $51,550 per ton.

Jing Xiao, an analyst at SDIC Futures, said: “We do not see any fundamental change in the tin market. The price surge is mainly being driven by speculative trading.”

Tom Langston of the International Tin Association shared the same view, noting that supply-demand fundamentals remain unchanged, while fund appetite on the London exchange has reached record levels.

Other metals performance

Aluminium on the LME: +0.1% to $3,200 per ton

Zinc: +1% to $3,232

Lead: +0.4% to $2,069

Nickel: +1.7% to $17,975 per ton