This Week's Market Strategy - January 21, 2025 (Tuesday)

Following BOJ Governor Ueda's hawkish remarks on Wednesday of last week stating "we will discuss the possibility of a rate hike this Friday," USD/JPY fell sharply from the high of 158.198 yen recorded on Tuesday last week and hit a low of 154.981 yen on Friday. This week, after President Trump's inauguration in the early hours today, USD/JPY is being sold again and has begun breaking below last week's lows. Momentarily broke below 155 yen. The probability of a 0.25% rate hike at the BOJ's monetary policy decision meeting on Friday this week appears quite high. However, approximately 70-80% is already priced in.

USD/JPY is likely to decline further in the ultra-short term, but is expected to resume an uptrend from mid-week onwards. A decline to the 154 yen range is recommended for buying. Below 150 yen is a stop loss.

WTI crude oil futures rose significantly from the week before last through Wednesday of last week due to reports of new US energy sanctions on Russia (by the Biden administration), beginning to reach the $80 range. However, when President Trump's crude oil production increase policy was announced, prices fell back and are currently in the $76 range.

WTI crude oil: buying is recommended in the $75 range short-term, selling ahead of $84, and stop loss above $85.

Gold prices rose to the $2,750 per ounce level at the end of last week. The US core consumer price index announced Wednesday of last week showed an unexpectedly slower year-over-year pace. Following President Trump's inauguration yesterday when the dollar was sold, gold has maintained its high price plateau.

Gold from a long-term perspective: buying recommended at $2,600-2,750 range.