Tech-Led Equity Rally Rolls On as the Yen Tests Key Resistance

A wobbling dollar keeps gold, silver, and FX hedges in the driver’s seat as stocks await the Fed and big-Tech earnings.

Key Takeaways

• Japan Becomes the Macro Fault Line: The yen is testing key technical levels around ¥154, and JGB volatility remains elevated. Whatever happens in Japan will not stay in Japan: global bond markets and currencies are watching the push-and-pull between Takaichi’s fiscal agenda, election dynamics, debt sustainability, and intervention signals. Meanwhile, risk assets enjoy the weak greenback.

• Markets Largely Shrug Off the Tariff Talk: The U.S. President’s renewed tariff threats toward South Korea and Canada are being mostly dismissed. Korean equities are rallying on a Tech tailwind, while Canadian assets are benefiting from a renewed basic resources bid.

• BoC Likely Not Done: A widening disinflationary output gap and still-depressed rate-sensitive sectors argue for further easing. Limited fiscal support and rising trade uncertainty put more weight on monetary policy, which is supportive for GoC bonds versus “indefinitely sidelined” pricing. Commodity firmness and a softer U.S.-dollar backdrop should help cushion the currency.