Over the weekend, Japan prime minister Takaichi spoke about the yen currency's weakness in saying that it has been beneficial for exporters. It's not the kind of bias you would want to hear from her especially in such a sensitive time. For one, it comes off as tone deaf amid households grappling with higher living costs. Secondly, it runs against the kind of pushback that the ministry of finance has been dishing out since the past two weeks.Naturally, Takaichi tried to walk back her comments in saying that she "does not favour either a weak or strong currency". But in a time like this, the damage has already been done and all it does is just feeds the beast.USD/JPY is now up just 0.1% on the day to around 154.90 but the high earlier touched 155.51. A firmer dollar amid all the volatile selling in precious metals is also helping to underpin the mood, with the currency pair now well off the lows last week near the 152.00 level. The latest rebound though is stalling a little now at the 200-hour moving average (blue line):So, that's a key line in the sand to watch out for. A break above that will see the near-term bias switch to being more bullish once again. And if that were to be the case, expect Tokyo officials to step in with stronger conviction soon enough to quell further speculative moves.For now, USD/JPY is also already trading back above its 100-day moving average of 153.86. So, that's another point in the win column for dip buyers after Tokyo authorities broke that hold last week after another suspected 'rate check'.But now that we're seeing the fading impact of the 'rate check' moves, is it time for actual intervention to come in? I wouldn't be surprised. The writing has already been on the wall since early last week already: As good a time as any for Japan to intervene?That being said, just be reminded that actual intervention may not have a lasting impact unless we see a material shift in fundamental drivers for the Japanese yen. And so far, it doesn't quite seem like anything is changing - not at least in the short-term. This article was written by Justin Low at investinglive.com.

Bitcoin Price Prediction Focuses on $70,900 to $72,645 Support ZoneKey takeaways for crypto traders and investorsBitcoin futures are down roughly 10%, extending a developing bearish structureOrder flow shows sellers in control, with buyers increasingly passiveRecent rebounds lacked acceptance and failed to repair market structureDownside risk remains elevated unless behavior changesThe $70,900 to $72,645 zone is the next key area for technical evaluationEther futures: I am watching the zone of $2110. If and when reached, I will be patiently watching the price reaction.Bitcoin technical analysis overviewBitcoin futures are under pressure to start the week, down roughly 10%, following weakness that developed over the weekend in the 24/7 spot market. From a bitcoin technical analysis perspective, the magnitude of the move is less important than how the decline unfolded.Rather than a sudden panic-driven sell-off, order flow shows that weakness had been building over time. Buyers gradually lost control of key reference levels, while sellers became more effective well before the downside acceleration became obvious on traditional price charts.This type of development often precedes larger directional moves and is a key reason why the broader bitcoin price prediction framework remains cautious.Weekly Market Opening Update: February 2, 2026The trading week has commenced with a defensive tone across major asset classes. As geopolitical premiums shift and industrial demand concerns linger, we are seeing a synchronized move toward volatility, particularly within the commodities and digital asset sectors.Energy: OPEC+ Stability and Fading Risk PremiumsThe crude oil market opened the week on the back foot following the latest policy signals from major producers. Oil opened lower after OPEC+ maintained its March output levels, choosing stability over intervention. This decision comes at a sensitive time; the "Iran risk premium" that had previously propped up prices is beginning to wobble. Without a fresh supply-side catalyst or a resurgence in geopolitical tensions, traders are increasingly focusing on the demand outlook, leading to a soft start for energy benchmarks this Monday.Precious Metals: Volatility Remains the Primary DriverThe safe-haven sector is providing little relief for those seeking calm. Precious metals remain in the spotlight as volatile selling continues, characterized by sharp intraday swings and aggressive liquidations. While gold and silver typically benefit from economic uncertainty, the current "selling begets selling" environment suggests a deleveraging event is underway. Traders should watch for key support levels, as the momentum currently favors the bears in the immediate short term.The Shift to Risk-Off: Crypto Gaps DownThe cautious sentiment in traditional commodities has spilled over—and amplified—within the digital asset ecosystem. Over the weekend and into early Monday, the crypto market experienced a significant gap down, catching many levered participants off-guard.The headline story remains MicroStrategy’s aggressive treasury policy. The recent Bitcoin dip has put MicroStrategy’s strategy marginally underwater, a psychological level that often triggers broader market anxiety. However, for long-term investors, it is important to note that despite the price action, immediate balance sheet risks for the firm remain limited.As Bitcoin and Ethereum struggle to reclaim broken support levels following this morning's gap, the focus for the remainder of the week will be on whether this is a localized flush-out or the start of a deeper correction across the risk-asset spectrum.Back to Bitcoin Today (So Far)... How the downside structure developedIn the sessions leading into the sell-off, Bitcoin futures repeatedly failed to hold higher levels. Upside attempts became shorter and more fragile, while declines began to extend with noticeably less resistance.This imbalance is a classic early warning signal in technical analysis. When price falls more easily than it rises, it typically reflects deteriorating buy-side liquidity, even if volatility initially remains contained.Order flow confirmed this shift. Selling pressure increasingly met little opposition, and instead of seeing strong demand appear at lower prices, buyers stepped aside, allowing price to drift lower without aggressive liquidation.Why recent rebounds failed in Bitcoin futures todaySeveral intraday rebounds appeared during the decline. On the surface, these moves may have looked constructive, particularly on lower timeframes. However, order flow revealed that these were responsive bounces, not the start of a structural recovery.In practical terms, buying activity during these rallies was short-term and tactical, often driven by short covering rather than conviction. Price failed to achieve acceptance at higher levels, and sellers remained comfortable defending each rebound.From a technical standpoint, this behavior reinforces a bearish bias and suggests that recent upside attempts were corrective rather than trend-changing.Bitcoin price prediction: why the bias remains bearishThe current bitcoin price prediction is not based on a single candle or headline-driven event. Instead, it reflects a gradual deterioration in market structure.Key technical observations include:Selling pressure has become more efficientBuying responses have grown weaker and less persistentPrice continues to trade below key reference levels rather than reclaiming themUntil these conditions improve, downside risk remains elevated and rallies are best treated with caution.Key support zone to watch for Bitcoin futures this week: $70,900 to $72,645From a bitcoin technical analysis standpoint, the $70,900 to $72,645 region stands out as the next major area of interest.If price revisits this zone, the focus should be on market behavior, not predictions:Does selling pressure begin to slow?Does two-way trade emerge instead of one-sided downside?Is there evidence that sellers are meeting sustained demand?Only if price begins to stabilize and absorb selling pressure in this region would the bitcoin price prediction shift toward a potential bullish reversal, whether temporary or more durable.What today's bitcoin analysis is not suggestingTo avoid common misinterpretations:This is not a recommendation to buy BitcoinThis is not a call to short current pricesThis is not an attempt to identify a market bottomThe goal is to highlight where new technical information is most likely to emerge.What would change the Bitcoin outlookThe bearish bitcoin technical analysis would need to be reassessed if the market begins to show:Sustained stabilization instead of shallow reboundsClear evidence of selling absorptionImproved follow-through on rallies rather than immediate rejectionUntil then, patience remains essential.Bitcoin futures are lower not because of a single catalyst, but due to a gradual breakdown in market structure. Order flow continues to show sellers in control and buyers failing to reassert themselves. From a bitcoin technical analysis and bitcoin price prediction perspective, the $70,900 to $72,645 area is the next key zone to watch for signals, not action.For real-time updates and market context, traders can follow the free InvestingLive Stocks channel on Telegram. https://t.me/investingLiveStocks This article was written by Itai Levitan at investinglive.com.

The Friday move was one for the ages and even then, it still hasn't put a bad mark to gold and silver's performance to start the year. Even with the drop on Friday and the one today, gold is up some 8% so far in 2026 and silver up a little more closer to 9%. Sure, the numbers pale in comparison when you pit them against the surging runs in 2024 and 2025 especially. But on any other given year, these kind of numbers are more than solid.That speaks to the kind of environment we're trading in over the past two years, which is quite something in the precious metals space. It wasn't just three years ago that we could still see silver print $20 on the charts. Yet, here we are talking about a $40 correction in just two days like it isn't that big of a deal. Wild stuff.As we look to the new week, gold and silver will remain in the spotlight. That as traders and investors weigh up their positions and what to make of the sharp pullback/correction. The main question at this point is where do dip buyers step in?The latest dip today brings gold closer towards $4,600 and that seems to be where buyers are drawing the line for now. Meanwhile for silver, that is closer towards the $75 mark as seen on the charts.Now, these are just easy and round figures to point at. But in truth, it would be a fool's errand to be picking bottoms in this kind of market and especially with such volatility.I said it already when both gold and silver dipped to around $5,000 and $100 respectively last week, before the heavier and harder-hitting selling came about afterwards. And so, the same applies to the current predicament and price action as well.The selling will stop when it stops, so it's best not to rush in head first in thinking that you can time this kind of market. In situations like these, I'd much rather be a little late in the dip buying and miss out on the extra 5% to 10% gains than risk a potential 10% to 20% further wipe out in equity.And in any case, the big picture story dictates that this will be a healthy pullback/correction for both precious metals.The sharp drop we're seeing in the past two days doesn't change the fact that the fundamental factors driving up precious metals have gone away. They never left and are still very much at play, so that will keep the market landscape supportive of gold and silver in the medium-term.But for now though, it's best to let the correction run its course and that is where we are to start February trading.From a seasonal perspective, silver hasn't quite enjoyed February as much in recent years. So, just be mindful of that as that could lead to some added pressure in the opening week(s). Likewise for gold, as the precious metal hasn't been able to follow up with gains in February after January in recent years with the only exception being in 2025.Just some food for thought as we get into the new month. This article was written by Justin Low at investinglive.com.

Fitch sees India budget as growth-neutral as fiscal consolidation slowsBitcoin dip puts Strategy marginally underwater, but balance-sheet risks remain limitedChina PMI setback underscores fragile domestic demand at start of 2026 – INGJapan govmt walk back Takaichi yen remarks as election nears and intervention risk lingersChina private manufacturing PMI rises in January, but cost pressures intensifyAustralia job ads jump 4.4% in January, strengthening case for RBA hike tomorrowPBOC sets USD/ CNY reference rate for today at 6.9695 (vs. estimate at 6.9710)India budget derivatives tax hike slammed shares in special Sunday wipe out sessionOracle to raise up to $50bn in 2026 to expand cloud infrastructureJapan manufacturing PMI jumps back into expansion as demand and hiring surgeMelbourne Institute inflation gauge ticks up to 3.6% y/y, keeping RBA hike risk aliveBoJ: Moderate recovery, inflation persistence reinforce cautious further tightening caseOil opens lower as OPEC+ holds March output and Iran risk premium wobblesFormer "Mr Yen" Watanabe warns of risk of renewed yen selling backlash into Japan electionAustralia manufacturing PMI hits five-month high as growth accelerates in JanuaryJapan PM softens weak yen comments as election and intervention risks collideChina Pres Xi revive push for yuan as reserve currency amid global dollar dominance debateChina January PMI slips into contraction as weak demand clouds early-2026 growth outlookMonday open indicative forex prices, 02 February 2026 (ps. China January PMIs missed)Newsquawk Week Ahead: US PCE, BoJ, China Activity Data, Flash PMIs, Canada and Japan CPIPalantir, AMD, Alphabet and Amazon among the names reporting next weekinvestingLive Americas market news wrap: Gold down 10%, silver falls 30%At a glance:The yen weakened after PM Takaichi’s weekend comments on the benefits of a weak currency, before stabilising later in the session.Japan’s manufacturing PMI surprised to the upside, rising to its strongest level since 2022.China’s official PMIs slipped back into contraction, contrasting with firmer private PMI data and renewed yuan internationalisation rhetoric from President Xi.Oil prices traded heavy after OPEC+ held March output steady and offered no guidance beyond Q1.Asia-Pac equities were pressured by China data, Korea volatility, India’s budget shock, and tech weakness, with Japan the main outlier.Bitcoin continued to sell lower.The yen came under pressure after Prime Minister Takaichi’s weekend comments that a weak currency can be a major opportunity for export industries. USD/JPY climbed to highs around 155.45 before easing back toward Friday’s closing levels near 154.80–85. Later in the session, Japan’s manufacturing PMI data arrived, rising to 51.5 in January from 50.0, marking the strongest improvement since 2022.More broadly across FX, the US dollar was little net changed.From China over the weekend, President Xi Jinping renewed calls for the yuan to attain a global reserve currency status, backing expanded trade settlement and alternative payment systems. At the same time, official PMI data showed both manufacturing and services activity slipping back into contraction in January, underscoring ongoing weakness in domestic demand. That contrasted with private data later in the session, as the RatingDog manufacturing PMI rose to 50.3, signalling modest expansion for a second consecutive month.Oil prices traded on the heavy side. OPEC+ agreed to hold output policy steady for March, extending the first-quarter pause in planned production increases. The group offered no guidance beyond March, keeping optionality high amid uncertainty around Iran and the global demand outlook. President Trump said the US and Iran would hold talks, a message echoed by unnamed US officials.The Bank of Japan’s January Summary of Opinions showed comments on a moderate economic recovery and ongoing inflation pressures, with policymakers indicating that gradual rate increases would be appropriate if current forecasts are realised.In Australia, manufacturing PMI rose to a five-month high in January, while the Melbourne Institute Inflation Gauge increased 0.2% m/m (previously 1.0%). The annual pace edged up to 3.6% y/y, keeping inflation concerns alive as markets debate the risk of an RBA rate hike on February 3.Asia-Pacific equities were broadly pressured amid several bearish themes, including the partial US government shutdown, the surprise contraction in China’s official PMIs, and lingering fallout from the recent historic collapse in precious metals. Sentiment was also dented by tech-related weakness following reports that Nvidia’s planned USD 100bn investment in OpenAI had stalled.South Korea saw sharp volatility, with authorities briefly halting program trading on the KOSPI for five minutes after futures dropped 5%. The KOSPI fell 5% on the day, led by sharp losses in Samsung and SK Hynix, marking its biggest fall since November 2021.US equity index futures fell in thin Sunday evening trade. Japan’s Nikkei was a notable exception, supported by the weaker yen and expectations of Takaichi-led fiscal stimulus. Oracle is to raise up to US$50bn in 2026 to expand cloud infrastructure.In India, a hike in derivatives transaction taxes announced in the budget slammed equities during a special Sunday trading session. The Nifty 50 fell about 1.96% and the Sensex dropped around 1.88%, marking the worst Budget-day performance in six years.Bitcoin continued to lose ground. Asia-Pac stocks: Japan (Nikkei 225) -0.48%Hong Kong (Hang Seng) -2.4% Shanghai Composite -1.3%Australia (S&P/ASX 200) -1% (ps. Reserve Bank of Australia interest rate statement due Tuesday local time)RBA due at 0330 GMT on Tuesday, February 3, 2026 / 2230 US Eastern time on Monday, February 2, 2026 This article was written by Eamonn Sheridan at investinglive.com.

Fitch said India’s budget underscores macro stability and fiscal credibility, with growth seen steady.Summary:Fitch Ratings said India’s latest budget reinforces its commitment to macro stability, even as fiscal consolidation slows.The agency views the FY27 deficit target of 4.3% of GDP as modest progress, reflecting the growing difficulty of further consolidation.Fitch described the budget as broadly neutral for growth, forecasting FY27 GDP growth of 6.4%.Elevated deficits, debt and interest costs remain a constraint, though stronger capital expenditure is supporting medium-term growth potential.Indian equities edged higher, with the Sensex and Nifty 50 both turning positive after the Fitch comments.Earlier:India budget derivatives tax hike slammed shares in special Sunday wipe out sessionIndia’s budget has drawn a measured response from Fitch Ratings, which said the government continues to demonstrate a commitment to macroeconomic stability, even as the pace of fiscal consolidation slows into the next financial year.Fitch said the government’s plan to target a 4.3% of GDP fiscal deficit in FY27 represents only modest consolidation, but is broadly consistent with its view that further deficit reduction is becoming increasingly difficult. While the deficit remains above pre-pandemic levels, the agency noted that this largely reflects higher capital expenditure, rather than a deterioration in fiscal discipline.From a growth perspective, Fitch characterised the budget as broadly neutral. The agency maintained its FY27 growth forecast at 6.4%, indicating that the budget neither materially boosts nor undermines India’s near-term growth outlook. Instead, the emphasis appears to be on balancing fiscal credibility with continued support for infrastructure and investment-led expansion.Fitch highlighted that India’s general government deficits, debt burden and interest payments remain elevated compared with peers, and are likely to decline only gradually. That structural backdrop limits the scope for aggressive fiscal easing, reinforcing the government’s cautious approach. However, the agency said India’s lengthening record of fiscal credibility should continue to support its credit profile over time, particularly as reforms are layered on top of recent progress.The agency also pointed to scope for further reforms, especially on deregulation, which could help build on recent momentum. Fitch said sustained reform efforts would be key to boosting private investment, improving resilience, and potentially lifting India’s long-term growth trajectory beyond current expectations.Markets took the comments in stride. Indian equities moved higher, with the BSE Sensex last up around 0.3% and the Nifty 50 turning positive, up roughly 0.15%. Overall, Fitch’s read of the budget reinforces a familiar message for markets: India’s fiscal path remains credible but constrained, with incremental progress rather than dramatic tightening, and growth still underpinned by public investment and reform momentum rather than short-term stimulus. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Bitcoin’s pullback into the mid-$75,000s has pushed Michael Saylor’s Strategy marginally below its average bitcoin cost base.While the firm is technically “underwater” on paper, analysts see no balance-sheet stress or forced-selling risk.Strategy’s bitcoin holdings are unencumbered, and its debt structure allows significant flexibility.The main impact of lower bitcoin prices is on future fundraising capacity, not solvency.History suggests slower accumulation during periods when Strategy trades below the value of its bitcoin holdings.Info via CoinBase. Bitcoin’s recent slide to around $75,200 has pushed Strategy below the average price it paid for its vast bitcoin holdings, putting the company’s flagship digital asset position marginally underwater for the first time in months. The move has attracted attention given the scale of Strategy’s exposure, but analysts argue it does little to change the underlying financial reality of the firm.Strategy, led by executive chairman Michael Saylor, holds approximately 712,647 bitcoin, acquired at an average cost of about $76,000 per coin. The latest dip means the market value of those holdings has slipped slightly below the purchase price. However, observers note that the headline optics overstate the risk. The company’s bitcoin is fully unencumbered, with none pledged as collateral, eliminating the threat of forced liquidation tied to price declines.Concerns have also resurfaced around Strategy’s $8.2 billion in convertible debt, but analysts point out that the structure of those obligations provides ample breathing room. The first meaningful put date on the convertibles does not arrive until the second half of 2027, giving the company years to manage maturities. Strategy also retains the option to roll over debt, convert it into equity, or deploy alternative capital tools if needed—approaches that have already been used by other bitcoin-focused treasury firms.Liquidity further cushions the balance sheet. Strategy is holding more than $2 billion in cash, earmarked primarily for dividend payments, reinforcing the view that near-term financial stress is not an issue even with bitcoin trading below cost.Where the price pullback does matter is in capital raising. Strategy has historically expanded its bitcoin position by issuing shares through at-the-market equity programmes. This approach works best when the stock trades at a premium to the market value of its bitcoin holdings. With bitcoin falling sharply from recent highs and Strategy’s market valuation compressing, that premium has narrowed or flipped into a discount, making new equity issuance less attractive.As a result, analysts expect the company’s pace of bitcoin accumulation to slow rather than reverse. A similar dynamic played out in 2022, when Strategy added relatively little to its holdings during an extended period of weaker prices.In short, trading slightly below cost is not a crisis. It signals a pause in aggressive accumulation rather than financial distress, leaving Strategy positioned to wait for more favourable market conditions. No, not yet ... This article was written by Eamonn Sheridan at investinglive.com.

Summary:China’s official PMI data point to persistent domestic weakness at the start of 2026, according to analysis from ING.The official manufacturing PMI fell back into contraction, reinforcing doubts that December marked a genuine turning point.Price indicators showed tentative improvement, offering some relief from deflation concerns.Private-sector PMI data painted a more constructive picture, highlighting the role of exports and private firms.Services activity also slipped into contraction, underscoring the challenge of reviving domestic demand.China’s softer-than-expected PMI readings in January suggest that domestic economic challenges have carried over into the start of 2026, even as external demand continues to provide pockets of support, according to analysis from ING Group.The official manufacturing purchasing managers’ index slipped back into contractionary territory at 49.3 in January, down from 50.1 in December and well below market expectations for a second month of expansion. The setback reinforces concerns that December’s improvement may have been temporary rather than the start of a sustained recovery. Manufacturing activity has now been in contraction for nine of the past ten months, highlighting the fragility of underlying demand conditions.ING noted that the weakness was broad-based across most sub-indices. Production remained marginally in expansion but slowed notably, while new orders fell back below the 50 threshold, erasing December’s gains. Export orders also deteriorated, pointing to softer momentum even as overseas demand remains comparatively stronger than domestic consumption. Other indicators, including employment and order backlogs, edged lower, reinforcing the picture of subdued factory activity.There were, however, some tentative positives in the price data. Measures of ex-factory prices moved into expansion for the first time in almost two years, while raw material input costs rose to their highest levels in around 20 months. ING views these developments as encouraging signs in the context of China’s long-running deflation concerns, even if they do not yet signal a broader turnaround in demand.The official PMI also highlighted a growing divergence by firm size. Large enterprises continued to outperform, remaining in expansionary territory, while small and medium-sized firms stayed under pressure—an outcome consistent with tighter financing conditions and weaker domestic demand.In contrast, private-sector survey data painted a more optimistic picture. The RatingDog manufacturing PMI edged higher in January, supported by gains in production, new orders and employment, alongside rising output prices. ING noted that this divergence reflects differences in survey coverage, with the private PMI skewed more toward export-oriented and privately owned firms, which have benefited from stronger external demand.The contrast echoes a key theme from 2025, when exports and industrial output held up relatively well while household demand and services lagged. That imbalance was also evident in the non-manufacturing PMI, which slipped back into contraction in January, hitting its weakest level in more than three years. Services indicators such as new orders softened again, underscoring the difficulty policymakers face in shifting growth toward domestic consumption.Overall, ING concludes that China’s PMI data point to stabilisation rather than recovery. Without a more durable pickup in domestic demand, the economy is likely to remain reliant on external drivers and policy support as 2026 unfolds. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Japan’s government is trying to walk back and “de-risk” Prime Minister Sanae Takaichi’s weekend remarks that were widely interpreted as being comfortable with a weak yen. And also insensitive to Japanese people grappling with higher cost of living brought on somewhat by the lower yen driving up the JPY cost of imports. A government spokesperson refused to comment on FX levels and said Takaichi was not endorsing yen weakness, but arguing for an economy resilient to currency swings.The clarification highlights a growing messaging problem: political campaigning is colliding with the finance ministry’s long-running stance that it may act against “excessive” FX moves. Markets remain sensitive because yen weakness is feeding inflation, while the Bank of Japan has openly debated the risk of being behind the curve on inflation. With the February 8 snap election approaching, inconsistent rhetoric risks adding volatility to USD/JPY and long-dated JGBs as investors reassess intervention and policy risks.Japan’s currency messaging is getting messier after new comments from a government spokesperson sought to neutralise market fallout from Prime Minister Sanae Takaichi’s weekend remarks on the yen.In brief, the spokesperson on Sunday declined to comment on specific foreign-exchange levels, while emphasising that Takaichi was not attempting to advertise the benefits of a weak yen. Instead, the spokesperson said the prime minister’s intention was to stress the goal of building a stronger domestic economy that can withstand exchange-rate fluctuations.That clarification follows Takaichi’s campaign comments a day earlier that were taken by markets as being relatively tolerant of yen weakness, an awkward tone given the government’s parallel effort to keep intervention risk credible. Reporting around the remarks highlighted the contrast between campaign rhetoric and the finance ministry’s repeated warnings that it will respond if FX moves become excessive or disorderly. The timing matters. The yen has been hovering near multi-month lows, and currency depreciation has become politically sensitive because it lifts import costs and adds to household inflation. That inflation channel is also central to the BOJ debate: the bank’s January meeting discussion leaned more hawkish, with some policymakers raising concerns about falling behind the curve if inflation risks intensify, particularly when yen weakness is amplifying price pressures. Markets have already shown they are quick to punish perceived policy slippage. Recent episodes of yen weakness and bond-market volatility have been linked to worries about fiscal loosening under Takaichi, including tax-cut talk, with some investors likening the risk to a credibility shock if policy discipline is questioned. Those dynamics make message discipline critical: if the government wants to deter one-way yen selling, it cannot appear relaxed about depreciation, even rhetorically.The spokesperson’s attempt to “reframe” Takaichi’s comments is therefore best read as damage control and a reminder that Tokyo wants to keep two options alive at once: supporting growth and reflation domestically, while preserving the ability to warn markets against disorderly FX moves.For traders, the takeaway is that the yen story is now a political story as much as a monetary one. With the February 8 election nearing, any further muddled messaging risks adding headline-driven volatility, especially if it clashes again with finance ministry guidance or BOJ hawkishness. This article was written by Eamonn Sheridan at investinglive.com.

China’s private manufacturing PMI edged higher in January, but rising costs and weak confidence point to a fragile and uneven recovery.Summary:China’s private-sector manufacturing PMI edged higher in January, signalling a second straight month of modest expansion.Output and new orders improved, with overseas demand—particularly from Southeast Asia—providing support.Employment rose slightly and backlogs eased, pointing to marginal operational improvement.Cost pressures intensified, pushing factory-gate prices higher for the first time in over a year.The private PMI contrasts with weaker official PMI data, highlighting a still-fragile and uneven recovery.China’s manufacturing sector showed tentative signs of improvement at the start of 2026, according to private-sector PMI data, though the recovery remains shallow and increasingly challenged by rising cost pressures and subdued confidence.The RatingDog China General Manufacturing PMI rose to 50.3 in January, up from 50.1 in December, remaining just above the 50 threshold that separates expansion from contraction. While the reading points to continued growth for a second month, the pace of improvement was modest and broadly consistent with a fragile recovery rather than a strong rebound.Production expanded at a slightly faster rate as manufacturers reported higher new business inflows. Demand conditions improved marginally, supported by a renewed rise in export orders following a contraction in December. Survey evidence pointed to firmer demand from Southeast Asian markets, helping to offset still-soft conditions at home. Total new orders have now expanded for several consecutive months, though growth remained limited, with some firms citing elevated prices and weak underlying market conditions as constraints.Manufacturers responded to rising workloads by increasing staffing levels for the first time in three months. Although employment gains were modest, the increase in workforce capacity, alongside efficiency improvements, helped reduce outstanding work for the first time since mid-2025. Purchasing activity also strengthened as firms replenished raw materials and semi-finished goods, leading to a second consecutive rise in input inventories. In contrast, stocks of finished goods continued to decline as companies focused on fulfilling existing orders rather than building inventories.Supply-chain conditions were broadly stable, with delivery times unchanged. However, inflationary pressures intensified. Input costs rose at their fastest pace in four months, driven largely by higher metals prices amid a broader commodities upswing. As a result, manufacturers lifted output prices for the first time since November 2024, with export charges also increasing at the quickest pace in around 18 months.Despite these improvements, business confidence weakened. Sentiment fell to a nine-month low as firms expressed concern over rising costs and uncertainty around the broader economic outlook. The softer confidence reading reinforces the message that momentum remains fragile.Crucially, the private PMI stands in contrast to official PMI data from China’s National Bureau of Statistics, which showed both manufacturing and non-manufacturing activity slipping into contraction in January. The divergence underscores the uneven nature of China’s recovery, with pockets of export-linked resilience sitting alongside weak domestic demand and cautious consumers.Taken together, the data suggest China’s manufacturing sector is stabilising rather than accelerating. Without a stronger demand recovery or more decisive policy support, rising cost pressures risk squeezing margins and limiting the durability of the upturn. This article was written by Eamonn Sheridan at investinglive.com.

Australian job ads surged in January, signalling renewed labour demand and reinforcing expectations the RBA may need to tighten policy.Summary:Australian job advertisements surged 4.4% m/m in January, snapping a six-month run of declines and marking the strongest monthly gain in four years.The rebound adds to evidence the labour market remains resilient despite higher interest rates and slowing growth elsewhere.Job ads are only modestly lower than a year ago and remain well above pre-pandemic levels.Hiring gains were concentrated in consumer-facing sectors, suggesting demand has not cooled materially.The data reinforces market expectations that the RBA may well hike tomorrow, February 3, amid sticky inflation and labour tightness.Australia’s labour market showed renewed momentum at the start of the year, with private-sector data pointing to a sharp rebound in hiring demand that underscores the economy’s resilience and complicates the near-term policy outlook for the central bank.Job advertisements rose 4.4% in January, reversing a 0.8% decline in December and ending a six-month downward streak, according to data compiled by Australia and New Zealand Banking Group and employment platform Indeed. The January increase was the strongest monthly rise in four years, signalling that employers have become more willing to add staff after a prolonged period of caution.In level terms, job ads were just 3.2% lower than a year earlier, a relatively modest pullback. Importantly, advertised job numbers remain 11.8% above pre-pandemic levels, highlighting how elevated labour demand continues to be relative to historical norms.The rebound was led by consumer-facing sectors such as retail, customer service and food services, areas that are typically sensitive to shifts in household spending. The strength in these categories suggests that demand conditions have not softened as much as policymakers might have hoped, even as higher borrowing costs squeeze real incomes.For markets, the timing of the data is critical. The strong jobs print lands just ahead of the next Reserve Bank of Australia policy decision, with investors increasingly convinced that inflation risks remain tilted to the upside. Market pricing implies roughly a three-in-four chance of a 25bp rate hike, reflecting concerns that resilient labour demand could sustain wage growth and slow the return of inflation to target.While job advertisements are not a direct measure of employment outcomes, they are widely viewed as a forward-looking indicator of labour market conditions. The January surge suggests that the expected cooling in hiring demand has been delayed, raising the risk that labour market tightness persists longer than anticipated.From a policy perspective, the data strengthens the argument for caution. Even if the RBA opts to hold rates steady in the near term, the combination of firmer inflation readings and renewed labour demand boosts the scope for hiking ahead. RBA policymakers may need to maintain a hawkish lean until clearer signs of slack emerge in the jobs market.Overall, the January job ads rebound reinforces a key theme of the Australian outlook: growth may be slowing, but the labour market remains a pillar of strength, complicating the inflation fight and keeping rate expectations elevated.-Coming up on February 3:That 0330 is GMT, which is 2230 US Eastern time. Reserve Bank of Australia Governor Bullock news conference is an hour later. This article was written by Eamonn Sheridan at investinglive.com.

Earlier:China Pres Xi revive push for yuan as reserve currency The PBOC follows a managed floating exchange rate system. Allows the yuan to fluctuate within a +/- 2% range, around a central reference rate, or "midpoint."Previous close 6.9566Injects 75bn yuan in 7 RRs @ 1.4% (net 75.5bn drain after maturities today) This article was written by Eamonn Sheridan at investinglive.com.

India’s budget-driven derivatives tax hike is seen as a near-term equity headwind, with investors also disappointed by the lack of immediate measures to stem foreign outflows.Summary:India’s budget proposal to raise taxes on equity derivatives trading is being flagged by analysts and fund managers as a near-term headwind for domestic equities, mainly via higher trading friction and potential liquidity impacts. The budget increases the securities transaction tax (STT) on equity futures to 0.05% from 0.02% and on options to 0.15% from 0.10%, lifting the cost of trading in a market where derivatives volumes are large. The same package did not include major, immediate measures to entice foreign flows, a key disappointment given ongoing foreign selling. Indian equities fell sharply on budget day, reflecting concerns about liquidity, valuation sensitivity, and a lack of foreign-investor “sweeteners.” The near-term focus is on whether the tax changes cool activity and whether domestic flows can continue to offset foreign outflows amid a tighter global backdrop.India’s latest budget proposals have put domestic equities on watch after the government outlined higher transaction taxes on equity derivatives, a move analysts say could weigh on near-term sentiment by raising trading costs without delivering immediate offsets aimed at stabilising foreign portfolio flows.At the centre of investor concern is a proposed increase in the securities transaction tax (STT) applied to derivatives. Under the budget plan, STT on equity futures rises to 0.05% from 0.02%, while the levy on options premium is increased to 0.15% from 0.10% (with the tax on exercised options also lifted). In practice, this increases friction in a part of the market that plays an outsized role in price discovery and liquidity.Market participants argue the bigger issue is not only the tax increase itself, but the timing and the policy mix. The budget did not offer major, near-term initiatives designed specifically to draw foreign capital back into Indian equities, despite a backdrop of persistent foreign selling pressure. That omission matters because foreign flows often act as a marginal driver of index performance and sector leadership, especially during periods of global risk repricing.The immediate reaction was risk-off. Indian equities recorded their worst budget-day decline in six years, with broad-based selling across most sectors, as investors priced in potential impacts on trading activity and earnings sensitivity for market-facing financial firms. A key fear is that higher derivatives costs could reduce volumes and widen spreads at the margin, which can amplify volatility on down days and make rallies harder to sustain.Strategically, the government appears to be leaning toward cooling speculative excess in an “overheated” derivatives market rather than prioritising flow support. But for equity investors, the near-term question is whether domestic institutional buying remains strong enough to counterbalance foreign outflows, and whether earnings and central bank policy become the dominant catalysts once the budget impulse fades. Overall, the message from analysts and fund managers is straightforward: a derivatives tax hike can be absorbed over time, but in the near term it risks acting as a drag on sentiment, especially if foreign selling remains active and the policy package lacks immediate confidence-building measures for offshore investors. ---The big sell-off in Indian stocks tied to the budget tax story occurred on February 1, 2026. Saw India’s main indices post their worst Budget-day performance in six years, with the Nifty 50 down about 1.96% and the Sensex falling around 1.88% as investors sold off broadly and in particular brokers, exchanges and mid-/small-caps amid concerns about higher trading costs and absent measures to support foreign inflows. This adverse reaction unfolded during a special Sunday trading session held alongside the Union Budget announcement, highlighting how swiftly markets repriced risk once the tax changes were unveiled. This article was written by Eamonn Sheridan at investinglive.com.

Oracle plans a $45–50bn capital raise in 2026 to fund cloud infrastructure expansion, splitting funding between equity and a one-off bond issuance.Summary:Oracle plans to raise $45–50bn in 2026 to expand Oracle Cloud Infrastructure capacity.Funding will be split roughly evenly between equity and debt.Equity raising includes mandatory convertibles and up to $20bn via an at-the-market programme.Debt funding will come from a single investment-grade bond deal early in 2026.The plan reflects strong contracted cloud demand from major technology customersOracle Corporation said it plans to raise between $45 billion and $50 billion in 2026 to fund a significant expansion of its cloud infrastructure capacity, as demand from large enterprise and technology customers continues to grow.The company said the capital raising will be structured through a balanced mix of equity and debt, with the aim of preserving its investment-grade credit profile while funding long-term growth. The proceeds will be used to build additional Oracle Cloud Infrastructure capacity to meet already-contracted demand from some of the world’s largest technology groups.Oracle expects approximately half of the funding to come from equity-related issuance. This will include a combination of common equity and equity-linked securities, including a mandatory convertible preferred offering that will represent a relatively small portion of the overall equity raise. In addition, Oracle has authorised an at-the-market equity programme of up to $20 billion, allowing the company to issue shares gradually over time depending on market conditions and capital needs.The remaining funding is expected to be sourced from debt markets. Oracle plans a single issuance of investment-grade senior unsecured bonds early in the 2026 calendar year. The company said it does not expect to return to the bond market again later in the year, indicating a preference for a one-off transaction rather than multiple debt deals.Oracle said the funding strategy reflects its focus on disciplined capital allocation and balance-sheet strength as it scales its cloud business. The company has positioned Oracle Cloud Infrastructure as a core growth engine, competing more directly with other hyperscale cloud providers amid rising demand for data-intensive workloads, including artificial intelligence.The funding plan has been approved by Oracle’s board of directors. Goldman Sachs will lead the senior unsecured bond issuance, while Citigroup will lead the equity-related transactions, including the at-the-market programme and the mandatory convertible offering.The announcement underscores the scale of capital required to compete in global cloud infrastructure and highlights Oracle’s intention to lock in long-term capacity to support contracted customer demand through the next phase of growth. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s manufacturing sector returned to growth in January, posting its strongest improvement since 2022 as demand, output and hiring all rebounded.Summary:Japan’s manufacturing sector returned to expansion in January, recording its strongest improvement since August 2022.Output and new orders rose for the first time in well over a year, signalling a broad-based recovery in demand.Employment growth accelerated sharply as backlogs of work increased for the first time in three-and-a-half years.Cost pressures intensified, pushing selling price inflation to a 19-month high, partly reflecting yen weakness.Improved demand optimism was tempered by concerns around inflation and the durability of future growth.Japan’s manufacturing sector showed its clearest signs of revival in nearly three-and-a-half years at the start of 2026, with January PMI data pointing to a broad-based improvement in activity, demand, and employment. The latest survey suggests that factories are emerging from a prolonged period of stagnation, supported by stronger domestic and external demand, even as rising cost pressures re-emerge as a key risk.The headline S&P Global Japan Manufacturing PMI rose to 51.5 in January from 50.0 in December, moving back into expansion territory and marking the strongest improvement in operating conditions since August 2022. While the pace of growth remains moderate, the breadth of improvement across output, orders, and hiring underscores a notable shift in momentum.Production returned to growth for the first time since mid-2025 as new business inflows strengthened. Total new orders expanded at their fastest pace in nearly four years, reflecting improved demand conditions and successful product launches. Export demand also improved meaningfully, with overseas orders rising for the first time since early 2022, supported by firmer demand from key markets including the United States and Taiwan. Investment goods producers led the recovery, though gains were seen across all major manufacturing segments.The rebound in demand placed renewed pressure on capacity. Backlogs of work increased for the first time in three-and-a-half years, prompting firms to step up hiring. Employment growth accelerated to its strongest pace in more than three years as manufacturers sought to rebuild capacity after a prolonged period of caution. Purchasing activity also increased for the first time since late 2024, reinforcing the view that firms are positioning for sustained output growth.Despite the improving growth backdrop, inventories continued to decline. Input stocks were drawn down as materials were used to support higher production, while finished goods inventories fell at a slower pace as companies fulfilled rising orders. Supply-chain conditions remained mildly stretched, with delivery times lengthening due to staff shortages and low supplier inventories.Inflation pressures intensified notably. Input costs rose at the fastest pace in nearly a year, driven by higher labour and raw material costs as well as the weaker yen. Firms passed through some of these pressures, lifting factory-gate prices at the sharpest rate in 19 months. While confidence about the year ahead remains generally positive, supported by global demand for semiconductors and automobiles, business sentiment eased slightly as firms weighed inflation risks against the sustainability of demand.Overall, the January PMI signals that Japan’s manufacturing sector is regaining momentum, but the resurgence in price pressures will be closely watched by policymakers and markets alike. Earlier:Japan PM softens weak yen comments as election and intervention risks collideFormer "Mr Yen" Watanabe warns of risk of renewed yen selling backlash into Japan electionBoJ: Moderate recovery, inflation persistence reinforce cautious further tightening case This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

Australia’s Inflation Gauge cooled on the month but edged higher on the year, keeping inflation worries, and RBA hike risk,front and centre.Summary:The Melbourne Institute’s monthly inflation gauge rose 0.2% m/m in January, a sharp slowdown from 1.0% in December. The annual pace edged up to 3.6% y/y from 3.5%, keeping the signal consistent with inflation that is still uncomfortably sticky. The print lands at a sensitive moment for policy, with recent data (notably Q4 core inflation) already lifting expectations of a more cautious, or even tighter, RBA stance. A recent Reuters poll (reported Friday) showed a clear tilt toward a February 3 hike, highlighting how quickly the policy narrative has shifted back toward inflation control. Bottom line: a softer monthly read helps at the margin, but the still-high annual pace keeps pause/hike risk in play until the official CPI confirms a convincing downtrend.Australia’s Melbourne Institute Monthly Inflation Gauge posted a modest rise in January, with the index up 0.2% on the month after a much larger 1.0% gain in December. While the monthly pace cooled sharply, the annual rate ticked higher to 3.6% y/y from 3.5%, keeping the broader message one of inflation that is not yet comfortably back in the Reserve Bank of Australia’s target zone. Because the Melbourne Institute gauge is designed to provide a timely read on consumer price trends using an approach aligned with the ABS CPI framework, markets often treat it as a “temperature check” rather than a decisive signal on its own, particularly when the move is small. (Note, though, the importance of the data has diminished now that the Australian Bureau of Statistics provide monthly CPI readings in Australia.) Still, the direction of travel matters: the annual rate edging higher, even as the month-on-month pace moderated, fits with a theme investors have been grappling with since late 2025, disinflation is proving bumpy, and underlying pressures are not cooling as smoothly as policymakers would like.That context is important because the RBA has already been pulled back into a more hawkish conversation. Australia’s Q4 2025 inflation profile, especially on underlying measures, ran firmer than expected, which has lifted market pricing for tighter policy and sharpened the debate around whether the central bank can safely sit still. A Reuters poll reported late last week showed most economists expecting the RBA to lift rates at its February 2-3 meeting, a sharp reversal from earlier expectations of an extended hold. Against that backdrop, the January Inflation Gauge delivers mixed comfort. The smaller monthly increase is the kind of reading that, if repeated, would help rebuild confidence that inflation is moderating. But the slightly higher annual pace is a reminder that inflation outcomes are still running above levels consistent with a durable return to the RBA’s target band.For markets, the practical takeaway is that the Inflation Gauge is unlikely to change the near-term policy debate by itself. Instead, it reinforces the idea that the RBA’s next steps will remain tightly conditional on incoming official CPI and activity data. If inflation continues to print “sticky” and demand holds up, the RBA may be forced to maintain a restrictive stance for longer—and the risk of a hike remains alive. They are sitting around the policy table today and tomorrow at the RBA. This article was written by Eamonn Sheridan at investinglive.com.

BoJ policymakers signalled moderate economic momentum and stickier inflation trends, endorsing careful future rate increases if forecasts unfold as expected.Summary:BOJ policymakers agreed the Japanese economy has recovered moderately but noted uneven momentum in parts of the economy. Inflation is projected to continue rising moderately, underpinned by wage and price interactions and import pass-through. The depreciation of the yen is seen as adding to domestic price pressures via higher import costs. Financial conditions remain broadly accommodative even after recent policy tightening, and further rate increases were judged appropriate over time. Board members emphasised careful, timely policy adjustments to balance price stability and economic resilience.The Bank of Japan (BOJ) released the Summary of Opinions from its January 22–23 Monetary Policy Meeting, shedding light on how board members currently view economic and price conditions ahead of the next policy decisions. While the economy has shown signs of moderate recovery, policymakers highlighted a mix of opportunities and risks that could shape future monetary moves. Overall economic activity in Japan was judged to have regained moderate momentum, supported by recoveries in global demand and government economic measures. However, some sectors still show uneven performance, and external policy shifts in key trading partners continue to influence the domestic outlook. The BOJ’s assessment is in line with its recent quarterly Outlook for Economic Activity and Prices report, which projects continued moderate growth partly supported by accommodative global conditions. On inflation, members expect consumer prices to continue rising at a moderate pace, with an ongoing interaction between wages and prices underpinning this trend. The pass-through of rising personnel costs into prices is considered moderate so far, though the impact of higher import costs, amplified by the weak yen, remains a key factor in price dynamics. Policymakers emphasised the need to monitor the balance between inflation, wages, and household income, especially as government measures and fiscal policy also play a role in shaping real income trends. Views on monetary policy reflect a cautious but increasingly vigilant stance. Even after the BOJ’s December decision to raise the policy rate to a level not seen in decades, financial conditions were judged to remain accommodative. Some members pointed to the appropriateness of continuing gradual rate increases if the current outlook materialises, with emphasis on careful timing and consideration of economic feedback effects. The board also discussed how to manage policy communication effectively to avoid lagging behind emerging price pressures, including risks tied to exchange rate movements. Long-term bond market developments and volatility in super-long Japanese government bond yields were noted as areas requiring ongoing attention, with indications that flexible responses could be needed under exceptional market conditions. In this context, members signalled that further adjustments to policy accommodation should be made in a timely way, without pre-commitment to a set pace but with responsiveness to data on prices, growth, and financing conditions. Government representatives attending the meeting underscored the importance of appropriate monetary policy coordination alongside fiscal efforts to achieve sustainable price stability and economic growth, highlighting cooperation under the Bank of Japan Act and shared objectives toward the inflation target.Full text here:Summary of Opinions at the Monetary Policy Meeting on January 22 and 23, 2026 Earlier:Japan PM softens weak yen comments as election and intervention risks collideFormer "Mr Yen" Watanabe warns of risk of renewed yen selling backlash into Japan election This article was written by Eamonn Sheridan at investinglive.com.

Oil opens softer as traders fade some geopolitical premium, while OPEC+ keeps March output unchanged and leaves the post-March path deliberately open.Summary:Oil is starting the week on the back foot after a strong run-up, as traders reassess how much geopolitical risk is already priced in. OPEC+ agreed to hold output policy steady for March, extending the first-quarter pause in planned increases. The group offered no guidance beyond March, keeping optionality high as uncertainty around Iran and demand trends persists. US–Iran tensions remain a two-way risk: escalation would tighten supply perceptions, but talk of dialogue can also drain the risk premium quickly. No Trump attack on Iran over the weekend is weighing on the oil price.On Saturday Trump told reporters Iran was "seriously talking" with Washington.Supply noise from Kazakhstan (including disruption/restart dynamics around the Tengiz oilfield) is another variable supporting recent tightness, even as 2026 “oversupply” debates linger.Oil prices are opening lower to begin the week, with markets taking a breath after a sharp January rally and a run toward six-month highs. The early pullback fits a familiar pattern: when crude rallies hard on geopolitical headlines, the next session often tests whether the “risk premium” can stay embedded without fresh escalation. The weekend decision from OPEC+ adds to the cautious tone. The group’s eight key producers, led by Saudi Arabia and Russia, reaffirmed that they will keep March output policy unchanged, extending the pause on planned increases that had already been rolled over for January and February. The pause followed a 2025 period in which quotas were lifted by roughly 2.9 million barrels per day from April through December, before the group opted to freeze further increases into early 2026 amid seasonally softer demand. What markets are noticing most was not just the hold, but the lack of forward guidance beyond March. That ambiguity matters because it keeps traders guessing about the group’s reaction function into Q2, when demand patterns and the “call on OPEC+ crude” can shift materially. It also signals that the alliance wants maximum flexibility while geopolitical risks remain fluid. Geopolitics remains the key swing factor. Reports that Donald Trump is weighing options on Iran, alongside indications both sides are at least signalling openness to talks, creates a wide distribution of outcomes. Escalation could rapidly lift crude via disruption fears; de-escalation can just as quickly compress the premium. Meanwhile, supply-side noise from Kazakhstan has been an additional support in recent sessions, with disruptions and staged restarts at the giant Tengiz complex tightening near-term balances at the margin. For now, crude’s softer open looks less like a fundamental regime change and more like positioning and risk-premium management: OPEC+ is steady, geopolitics is unresolved, and demand—especially from large importers—remains the big variable the cartel cannot control. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s election-driven fiscal debate is keeping bond and FX markets on edge, with any hint of looser policy risking renewed volatility.Summary:Japanese markets remain highly sensitive to fiscal policy signals ahead of the February 8 snap election, according to a former senior currency official.Any expansion of tax relief risks renewed selling pressure in government bonds and the yen.Investor nerves were exposed last month after proposals to cut food-related consumption taxes triggered sharp moves in JGBs and FX.While markets have stabilised, underlying concerns over debt, trade deficits and policy clarity persist.Election-driven fiscal promises could again test market tolerance and intervention thresholds.Japanese financial markets remain on a knife-edge as investors assess the risk that looser fiscal policy could resurface during the current election campaign, according to analysis from a former senior currency official in comments to Reuters.Concerns centre on the possibility that the ruling Liberal Democratic Party may lean further toward tax relief measures if political support appears to weaken ahead of the February 8 snap election. Even modest hints of expanded fiscal easing, particularly around consumption taxes, could reignite market volatility similar to the sharp selloff seen last month.That episode underscored investor sensitivity to Japan’s fiscal outlook. When Prime Minister Sanae Takaichi pledged a temporary cut to food-related consumption taxes, markets reacted swiftly. Super-long Japanese government bonds came under heavy pressure, while the yen weakened toward levels that have historically prompted official intervention. The moves revived global concerns about fiscal discipline in a country where public debt already exceeds twice the size of the economy.Since then, conditions have steadied somewhat. The yen has retraced part of its losses, aided by market speculation that Japanese and US authorities conducted so-called rate checks, a step widely interpreted as a warning shot ahead of potential FX intervention. Bond markets have also found temporary footing, though volatility remains elevated by historical standards.According to former vice finance minister Hiroshi Watanabe, investors remain acutely alert to political signals. Any suggestion that tax relief could broaden beyond current commitments risks provoking a renewed market backlash. He noted that recent policy messaging suggests senior officials have become more aware of the constraints imposed by global capital markets, particularly the caution expressed by large US and European investors.Despite the recent stabilisation, structural factors continue to limit the scope for sustained yen strength. Japan’s large public debt burden, a persistent trade deficit, and uncertainty surrounding the future path of Bank of Japan policy all weigh on investor confidence. While short-term yen rallies remain possible, especially if intervention risks resurface, longer-lasting appreciation appears difficult without clearer progress on fiscal sustainability and monetary normalisation.With election dynamics still in play, markets are likely to remain hypersensitive to policy headlines. The episode highlights how Japan’s reflation ambitions are increasingly constrained by the need to reassure investors that fiscal expansion will not come at the expense of long-term stability. This article was written by Eamonn Sheridan at investinglive.com.

Australia’s manufacturing sector started 2026 with stronger growth momentum, supported by rising orders, hiring, and improved confidence.Summary:Australia’s manufacturing sector expanded at a faster pace in January, marking a third consecutive month above the growth threshold.New orders strengthened sharply, including the first rise in export demand in five months, lifting production momentum.Employment growth accelerated to its strongest pace since early 2023 as firms responded to rising workloads.Supply-chain frictions persisted, contributing to higher input costs and renewed selling price inflation.Business confidence improved to its highest level in nearly four years, supported by a more optimistic demand outlook.Australia’s manufacturing sector entered 2026 on firmer footing, with January PMI data pointing to a clear acceleration in activity and improving demand conditions. The latest survey results indicate that growth momentum has broadened across output, orders, employment, and purchasing, reinforcing signs that the sector is emerging from a prolonged period of subdued conditions.The headline manufacturing PMI rose further above the 50 threshold in January, signalling a third consecutive month of expansion and the fastest pace of improvement in five months. Output growth strengthened as manufacturers reported a solid uplift in new business inflows, supported by both domestic demand and a renewed contribution from overseas markets. Notably, export orders expanded for the first time since late winter, suggesting external demand is beginning to stabilise after a prolonged lull.Stronger order books prompted firms to lift production schedules and expand capacity. Employment levels rose at the fastest pace in almost three years, reflecting both higher current workloads and improved confidence in future demand. The increase in staffing helped manufacturers reduce outstanding work, easing some operational pressures even as activity picked up.Purchasing activity also increased for a third straight month, broadly tracking the improvement in new orders. However, supply-side challenges remain a constraint. Manufacturers continued to report transport bottlenecks, port congestion, and material shortages, which led to further deterioration in supplier delivery times. While the pace of delays eased slightly, logistical disruptions contributed to slower inbound shipments and a further drawdown in input inventories. At the same time, delays to outbound deliveries resulted in an accumulation of finished goods stocks.Cost pressures intensified at the start of the year. Higher raw material prices and ongoing supply constraints drove the fastest rise in input costs in nine months. In response, manufacturers passed some of these increases through to customers, lifting selling prices again in January. That said, both input and output price inflation remained below long-run survey averages, suggesting cost pressures, while rising, are not yet excessive.Encouragingly, sentiment across the manufacturing sector improved markedly. Firms reported their strongest confidence in nearly four years, underpinned by expectations of firmer economic growth, improving market conditions, and planned business investment. Forward-looking indicators, including new orders and future output expectations, point to continued expansion in the months ahead, although supply constraints and inflation dynamics remain key risks to monitor. This article was written by Eamonn Sheridan at investinglive.com.