This Week's Market Strategy - March 4, 2025 (Tuesday)

Last week's foreign exchange market lacked catalysts, and on Tuesday USD/JPY momentarily broke below the December 3rd low of 148.647 yen.

Trading rebounded upward from that session's low of 148.568 yen and headed into the week, but ahead of President Trump's introduction of 25% tariffs on Mexico and Canada starting today, the market experienced a risk-off environment with stock prices sharply reversing downward last night, causing USD/JPY to plummet from the 151 yen range to the early 149 yen range.

The sharp decline in US dollar and long-term interest rates are also selling factors for USD/JPY. Since USD/JPY has broken below the December 3rd low of 148.644 yen, we are revising our scenario.

If there is a rally up to 154 yen from here, we prioritize the medium-term short strategy.

WTI crude oil futures fell to the 68 dollar range following Trump's statement to ease Russia sanctions after his heated exchange with Zelensky, coupled with reports that OPEC+ plans production increases as scheduled starting in April.

Given the excessive uncertainty surrounding WTI crude oil's decline, OPEC+ movements, and Russia sanctions-related factors, we are adopting a wait-and-see approach.

Meanwhile, gold prices were sold down from last week's all-time high of 2974 dollars to 2844 dollars, but hedge buying for gold occurred yesterday in reaction to the trade war triggered by Trump's tariffs, with prices recovering to the 2900 dollar range.

We do not chase gold, but from a long-term perspective, any breaks below 2,750 dollars would be a buying opportunity.