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The yield on Japans 40-year government bonds fell 4.5 basis points to 3.610%.On December 30, 2025, Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, stated at the 2025 International Situation and Chinas Diplomacy Symposium that the China-US relationship is one of the most important bilateral relationships in the world today. The strategic choices of both China and the US influence the direction of world history. Over the past year, we have adhered to viewing and handling our relations with the US from the perspective of our own overall and long-term interests and those of the world. We have maintained a firm and clear stance on major principled issues, and have been resolute and uncompromising on issues involving Chinas core interests. At the same time, we have engaged in dialogue and cooperation with the US, urging the US to view China rationally and objectively, and to resolve differences through consultation and dialogue. Wang Yi said that the practice of the development of China-US relations over the past year shows that mutual respect, peaceful coexistence, and win-win cooperation are key to the stable development of China-US relations and their benefit to the world. Cooperation between China and the US benefits both sides, while confrontation harms both. A condescending attitude is not a viable path, and inconsistency between words and deeds is unacceptable. China and the US must find ways to resolve their respective concerns on the basis of equality, respect, and mutual benefit, and explore the correct way for two major powers to coexist.On December 30, 2025, Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, stated at the 2025 International Situation and Chinas Diplomacy Symposium that the Taiwan issue is Chinas internal affair and is the core of Chinas core interests. Regarding the continuous provocations by "Taiwan independence" forces and the large-scale arms sales to Taiwan by the United States, we must resolutely oppose and forcefully counter them. This year marks the 80th anniversary of Taiwans return to the motherland. Achieving the complete reunification of the motherland is a historical mission we must fulfill, as it involves safeguarding national sovereignty and territorial integrity in accordance with the law. We have seen more and more countries standing with China, not only reaffirming their adherence to the one-China principle and recognizing Taiwan as Chinese territory, but also explicitly opposing all "Taiwan independence" separatist activities and supporting Chinas reunification cause. Any attempt to obstruct this historical trend will inevitably end in failure.The yield on Japans 5-year government bond rose 2.0 basis points to 1.545%.On December 30th, South Koreas nuclear regulator approved the start of operations for a reactor that had been under construction for nearly a decade, as the government reassesses the long-term role of nuclear energy. The Nuclear Safety and Security Commission (NSSC) announced in a statement Tuesday that the Saeul 3 reactor had received its commissioning permit, marking the first approval of a new nuclear reactor in South Korea in approximately two years. According to Yonhap News Agency, Korea Hydro & Nuclear Power Co. plans to begin commercial operations next year after completing a six-month trial run. Currently, South Korean President Lee Jae-myungs policy direction promoting renewable energy contrasts with his predecessors more pro-nuclear approach. In September, Lee stated that building more nuclear power plants was unrealistic because building a new facility from scratch would take more than 15 years. His government prefers to utilize reactors that are already in operation or under construction. The commissioning of the Saeul 3 reactor will help South Korea reduce its dependence on imported coal and natural gas.

Despite Japan's holiday, the USD/JPY has recovered to 143.00 while the Fed and BOJ remain vigilant

Daniel Rogers

Sep 19, 2022 14:48

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In spite of Monday's limited USD/JPY action due to Japan's vacation, the USD/JPY has recovered from intraday lows and is moving closer to recovering 143.00. The gold market is widely predicted to react strongly to the monetary policy meeting between the US Federal Reserve (Fed) and the Bank of Japan (BoJ) this week (BOJ).

 

Wall Street's major indexes ended the day on a down note, but the S&P 500 Futures are showing slight gains.

 

US Vice President Joe Biden's recent upbeat comments could be to blame. The head of state has also assured the public that inflation will be reduced. Covid developments from China include the unlocking of the city of Dalian in the province of Liaoning, the continued absence of coronavirus cases in Beijing, and the discovery of one such case outside of the Shanghai quarantine zone, up from the absence of any the day before.

 

USD/JPY purchasers appear to be bullish ahead of the significant monetary policy declarations due to President Biden's commitment to help Taiwan in the event that China strikes Taiwan and hawkish expectations for the Fed. It should be noted, however, that speculation over the BOJ's intervention appears to have halted the recent bull market.

 

The University of Michigan's preliminary September consumer sentiment index of 59.5 was up from the preliminary reading of 58.5 in August but still below market estimates of 60.0. The market's expectations of a full one percentage point increase in the Fed rate rose to 18% in light of the improved US statistics, while the probability of a 75 basis point (bps) boost by the Fed increased to above 80%, or 82% at the time of publication.

 

This session of USD/JPY could be slow due to the Japanese holiday and the relatively empty economic calendar. The Fed versus BOJ clash will be key for pair traders to observe this week. The economic forecasts and pronouncements of the various central bank heads are crucial, in addition to the interest rate announcements, which are generally factored in. It's possible that the USD/JPY might drop if Fed Chair Powell disillusions US dollar bulls and the BOJ shows it's willing to defend the yen through intervention.