Yen jumps on BOJ hawkish hints as risk-off grips markets; stocks slide, dollar softens, gold extends breakout
The Japanese yen surged at the start of December after BOJ Governor Kazuo Ueda warned against delaying rate hikes, sending USD/JPY lower and tightening risk appetite globally. Stocks retreated, Treasury yields ticked up and gold extended a technical breakout as traders entered a payrolls-free week focused on policy signals and sentiment.
Market snapshot
- USD/JPY slid from around 155.50 to near 154.90 as BOJ hike bets firm
- US equity futures weaker: S&P 500 -0.8%, Nasdaq 100 -1.0%; Europe in the red
- US 10-year Treasury yield up about 2.7 bps to 4.046%
- Dollar broadly softer; JPY leads, commodity FX firmer
- Gold up roughly 0.5% as a bullish technical breakout gathers pace
- WTI crude oil up about 1.1% near $59 after OPEC+ steadies supply outlook
- Bitcoin down roughly 5% toward the mid-$85,000s in a sharp pullback
Yen rallies as BOJ signals intensify
The yen outperformed after BOJ Governor Ueda warned that postponing a rate increase for too long could risk a sharp rise in inflation, stoking speculation of a December move. USD/JPY fell roughly 0.8% on the session, tracking its steepest daily decline since October 10. Japan’s chief cabinet secretary reiterated that monetary policy decisions rest with the central bank, underlining BOJ independence as the market reprices the policy path.
Dollar slips; euro and sterling edge higher
Risk aversion and shifting rate expectations knocked the dollar on the margins. EUR/USD firmed toward 1.1640, while GBP/USD nudged to around 1.3260 after UK final manufacturing PMI held at 50.2 and October mortgage approvals surprised to 65,018. Commodity-linked peers also gained modestly, with USD/CAD near 1.3961 and AUD/USD around 0.6556. ECB Vice President Luis de Guindos said current rates are appropriate, aligning with the euro area’s final November manufacturing PMI at 49.6 (slightly below the 49.7 flash print).
Risk-off tone weighs on equities as yields edge up
Global equities opened December on the back foot as investors rotated defensively following month-end flows and the ebb of the Thanksgiving lull. S&P 500 futures fell about 0.8%, led lower by tech as Nasdaq futures dropped around 1.0%. European benchmarks also slipped, with the DAX down roughly 1.5% and the CAC 40 lower by about 0.8%. The US 10-year yield edged higher to around 4.05%, a modest headwind for duration-sensitive growth stocks.
Gold extends breakout; oil steadies on OPEC+ stance
Gold advanced about 0.5%, extending a technical breakout as traders sought hedges against policy uncertainty and early-month volatility. The move underscores a constructive backdrop for bullion amid mixed risk appetite and a firmer yen. In energy, WTI crude gained roughly 1.1% near $59 after OPEC+ reaffirmed its stance on supply, helping stabilize prices above recent lows.
Crypto slides as appetite cools
Bitcoin fell about 5% in a swift move through the Asia session, dropping below the $90,000 handle and clustering near the mid-$85,000s. The reversal amplified the broader risk-off tone and tightened financial conditions across high-beta assets.
What’s on the radar
Fed Chair Jerome Powell is set to speak later, though markets do not expect fresh monetary policy guidance. With the calendar quirk removing the usual US non-farm payrolls report from this Friday, traders may lean more heavily on cross-asset risk sentiment, yield dynamics and any surprises from central bank speakers for direction into early December, BPayNews notes.
FAQ
Why is USD/JPY falling today?
The yen strengthened after BOJ Governor Ueda cautioned that delaying rate hikes too long could trigger a sharp inflation rise. That boosted odds of a potential December policy shift, pushing USD/JPY lower as markets repriced Japan’s rate outlook.
What’s driving the risk-off tone in equities?
A combination of early-month positioning, a modest rise in US yields and a sharp pullback in crypto has dampened risk appetite. Tech is underperforming, dragging broader indices and futures into the red.
How are the euro and sterling reacting?
Both EUR/USD and GBP/USD are firmer as the dollar softens. The euro got little help from final eurozone manufacturing PMI at 49.6, while sterling found support from steady UK PMI at 50.2 and stronger-than-expected mortgage approvals.
What is the near-term outlook for gold?
Gold’s technical breakout is attracting momentum buying and hedging demand. If yields stay contained and risk sentiment remains choppy, bullion could retain a constructive bid near term.
Why is oil up while stocks are down?
Oil is responding to supply-side signals after OPEC+ reaffirmed its stance, which supported crude prices. Equities, by contrast, are reacting more to risk sentiment, yields and sector-specific pressures, especially in tech.
Will Fed Chair Powell move markets today?
He’s not expected to deliver major policy news. However, any surprise remarks on the economy or inflation could affect yields, the dollar and broader risk sentiment.
Why is there no US non-farm payrolls report this Friday?
A calendar shift means the employment report will not arrive this week. The absence of NFP leaves markets more sensitive to cross-asset flows, central bank commentary and incoming secondary data for direction.
