This Week's Market Strategy - January 29, 2025 (Wed)

Last week, USD/JPY moved within a range from the latter half of 154 yen to the latter half of 156 yen.

Last week, President Trump was inaugurated, and at the Davos conference online speech, he demanded interest rate cuts from the FRB.

However, tonight's FOMC is expected to maintain rates. Following the BOJ's financial policy decision meeting on Friday where a 0.25% rate hike was announced as expected, USD/JPY was sold down to the latter half of the 154 yen range. However, at the start of this week, when China's DeepSeek announced affordable AI, high-tech stocks such as NVIDIA (down 17%) experienced a sharp decline, and USD/JPY also fell sharply to the latter half of the 153 yen range due to risk-off sentiment.

However, yesterday it recovered to 156 yen.

USD/JPY appears likely to decline further, but from next week onwards it is expected to resume an upward trend.

200-day moving average 152.80 yen, 100-day moving average 151.8 yen. A buy is recommended if prices fall to both support levels. Below 150 yen is a stop-loss.

WTI crude oil futures have declined 6.5% from the end of two weeks ago, trading around 74 dollars, due to reduced geopolitical risk following the ceasefire agreement and hostage release accord between Israel and Hamas, as well as President Trump's declaration of a national emergency to increase US oil and gas production, and his request at the Davos conference speech for Saudi Arabia and OPEC to lower crude oil prices.

WTI crude oil is a short-term buy at 72 dollars, with a stop-loss below 69 dollars. Gold prices fell 1.5% on Monday amid the sharp decline in high-tech stocks. However, as the dollar weakness continued last week, prices have trended gradually higher, hovering near 2,770 dollars. From a long-term perspective, gold below 2,700 dollars is a buy.