Market Volatility Intensifies After Japan's Rate Hike: Divergence in Global Central Bank Policies Becomes the Focus

Macroeconomic Turning Point

The Bank of Japan’s interest rate hike decision has sent ripples through the global financial markets. Japanese Finance Minister Shōzō Katō stated that after the central bank’s rate increase, the yen has come under depreciation pressure, and authorities will take appropriate measures to address excessive exchange rate fluctuations. The USD/JPY has risen 1.39% within 24 hours, approaching the 158.0 level, easing the risk of carry trade unwinding, but long-term concerns remain.

The yield on Japan’s 10-year government bonds broke through 2% after the BOJ’s move, reaching its highest level since 1999. Meanwhile, the US 10-year benchmark Treasury yield rose to 4.15%, up 3 basis points from the previous trading day. France faced setbacks in budget negotiations, with the 30-year government bond yield climbing to 4.525%, a new high since 2009. Global bond markets have experienced intense volatility, reflecting deepening divergence in central bank policies across countries.

Federal Reserve Stays on Hold, Outlook for Rate Cuts Changes

Federal Reserve officials have signaled caution. New York Fed President Williams emphasized that there is no urgent need to further adjust interest rates at present, believing that the current rate cuts have positioned policy appropriately. Cleveland Fed President Mester explicitly stated that there is no need to adjust the target range for the federal funds rate in the coming months. This contrasts sharply with the BOJ’s rate hike, indicating that global monetary policy divergence will continue to dominate market trends.

The US December Consumer Confidence Index showed weakness, with the final University of Michigan data rising to 52.9, below the expected 53.5. The current conditions index fell to a historic low of 50.4, indicating ongoing consumer concerns about economic prospects.

Stock Market Rebound Shows Technical Strength, Commodities Shine

The US stock three major indices rose on Friday, with the Dow up 0.38%, the S&P 500 gaining 0.88%, and the Nasdaq performing even stronger with a 1.31% increase. Friday marked the settlement day for four US futures contracts, with total expiring contracts reaching $7.1 trillion, boosting market trading activity.

In individual stocks, Oracle led gains with a 6.6% rise, Nvidia and Broadcom increased by 3.9% and 3.2%, respectively, with Nvidia being the strongest component of the Dow. On the other hand, Nike’s China business underperformed, with its stock dropping 10.5%.

European stocks closed higher across the board, with the UK FTSE 100 up 0.61%, Germany DAX 30 rising 0.37%, and France CAC 40 inching up 0.01%.

In commodities, silver prices were supported by investment demand and supply tightness, breaking through $67.0 to hit a record high. Gold closed for the second consecutive day as a doji star, currently at $4,338.6 per ounce, up 0.14%. WTI crude oil rose 1.14%, trading at $56.5 per barrel.

Fear Eases, Crypto Assets Demonstrate Resilience

The VIX fear index plummeted 11.57%, reflecting a rebound in market risk appetite. In the cryptocurrency market, Bitcoin is currently at $91,140, up 1.36% in 24 hours; Ethereum is at $3,140, up 1.10%. The stable performance of the crypto market resonates with the recovery in traditional assets.

Hong Kong stocks saw the Hang Seng Index futures at 25,843 points, 152 points higher than yesterday’s close. The China Enterprises Index futures stood at 8,958 points, 57 points above the previous close.

Dollar Remains Strong, Forex Market Diverges

The US dollar index rose 0.3% to 98.7, maintaining a strong stance. EUR/USD declined slightly by 0.12%, with the dollar remaining dominant against other major currencies.

New Policies Focus on Lunar Exploration, Tech Regulation Tightens

US President Trump signed an executive order on space, announcing the prioritization of a crewed lunar landing goal by 2028, followed by establishing a lunar base, with Mars missions temporarily shelved. The move aims to outpace China’s lunar exploration plans. New NASA Administrator Bill Nelson emphasized deepening cooperation with private space companies during his swearing-in.

In the tech sector, US House Republicans are calling for military-grade export controls on AI chips, with any processor reaching or exceeding specific performance standards to be strictly regulated. This indicates that technological competition and geopolitical tensions are further entangling.