Yen rises on intervention speculation, JP exporters declines – PLA instability?

Asia market update: Yen rises on intervention speculation, JP exporters declines; PLA Instability?, Precious Metals Records, and Storm “Fern”.

General trend and developments

- (US) Reportedly NY Fed performed rate checks on USD/JPY with counterparties, acting as a fiscal agent for the US Treasury - press [update from Fri, Jan 23rd].

- TTN Research Alert: Pres XI’s purge of PLA reaches Stalin-like levels with sudden removal of CMC Vice-Chair and PLA veteran General Zhang Youxia; Likely to cause panic and severe disruption among China’s elites; CCP likely to enter highly uncertain and unstable period.

- Japanese politicians debate the food sales tax cut.

- Spot Gold trades at record high >$5,000/oz; Record highs, also, scaled for Silver and Platinum.

- India and the European Union are set to sign a landmark Free Trade Agreement on January 27, 2026, which will immediately slash import tariffs on EU-made cars from 110% to 40%. This aims to open India’s protected automotive market to European giants like Volkswagen and BMW while temporarily exempting EV’s to support domestic manufacturers.

- US natural gas futures surged past $6.00/MMBtu for the first time since 2022 on Monday, January 26, 2026, driven by a severe winter storm named "Fern.".

- KRW rises by 1.3%, tracks strength in the Yen [**Reminder Jan 14th: (US) Treas Sec Bessent said: Excess volatility in the FX market is undesirable; Recent Korean Won (KRW) depreciation is not in-line with Korea's fundamentals - comments following meeting with S. Korea counterpart].

- BOJ futures fully pricing rate hike by June 2026 for the 1st time; plied chance of 25bps hike by June is at 102% v 93% d/d [from Tokyo close on Jan 23rd].

- US equity FUTS improved as Asian session progressed.

- US equity FUTs -0.27% to -0.40% during Asia trading.

Looking ahead (Asian-weighted focus, using Asian time zone)

- Mon Jan 26th (Mon eve US Nov Durable Goods).

- Tue Jan 27th KR Jan Bus. Confidence, AU Dec Business Confidence.

- Wed Jan 28th JP BOJ Minutes (2 mtgs ago), AU Dec CPI, (Wed night US FOMC).

- Thu Jan 29th NZ Dec Trade Balance, NZ Jan ANZ Business Confidence, SG MAS Policy Statement, PH Q4 GDP, JP Jan Consumer Confidence.

- Fri Jan 30th JP Dec Industrial Prod & Dec Retail Sales, AU Q4 PPI, (Fri eve DE, EU Q4 Flash GDP, US Dec PPI).

- Sat Jan 31st China Jan NBS Manufacturing PMI, KR Jan Exports.

Holidays in Asia this week

- Mon Jan 19th Australia, India.

- Wed Jan 28th Malaysia.

- Thu Jan 29th Malaysia.

Headlines/economic data

Australia/New Zealand

- (AU) ASX 200 closed for holiday.

China/Hong Kong

- (CN) Shanghai Composite opens +0.2% at 4,144.

- (HK) Hang Seng opens +0.4%.

- (HK) HKMA: To increase Yuan liquidity facility size to CNY200B.

- (HK) HKMA sees limited room for further cuts in the prime rate - HK press.

- (HK) Hong Kong Financial Services Sec Hui: Maintains dialog with the Mainland on IPOs; notes the establishment of gold contract clearing house.

- (CN) China's Top Military Commander, Gen. Zhang Youxia, is under investigation in corruption probe - WSJ [weekend update].

- (CN) China reportedly told biggest tech firms they can prep Nvidia H200 orders; To review volume of H200 chips Chinese firms buy - press [weekend update].

- (CN)China PBOC sets Yuan reference rate: 6.9843 v 6.9929 prior [strongest Yuan fix since May 17th 2023].

- (CN) China and Russia vow to strengthen coordination in Asia Pacific - press [weekend update].

- (CN) Guangdong Province targets 2026 GDP growth at 4.5-5.0% - Press [ Guangdong is the largest contributor to China's GDP].

- (CN) China PBOC Open Market Operation (OMO): Injects CNY150.5B; Net drains CNY7.8B v injects CNY38B prior.

Japan

- (JP) Nikkei 225 opens -1.5% at 53,029.

Reminder: earlier, Japan Fin Min Katayama: Declines to comment on if Japan intervened into FX; reiterates stance of watching FX with sense of urgency [late Fri update].

-Japan PM Takaichi: Would like to achieve 2-year suspension of 8% tax on food at the earliest date possible, submit relevant legislation in fiscal 2026 Diet.

- Japan PM Takaichi: Not realistic to create sovereign wealth fund combining BOJ ETF holdings, Pension Funds and FX Reserves.

- Japan sells ¥300B vs. ¥300B indicated in 5-Year Climate Transition Bonds; Yield at the Lowest Accepted Price: 1.6840% v 1.098% prior; bid-to-cover: 3.49x v 3.98x prior.

- Japan cabinet approval rating declines to 69.0% v 73.0% prior - Yomiuri Poll.

- Japan 10-year JGB FUTs open higher by >40bps.

- Japan Chief Cabinet Sec Kihara: Government will compile 'tentative' budget, if the FY2026 budget is not likely to pass parliament by the end of Mar - Jiji.

Korea

- Kospi opens 0.1% at 4,997.

- South Korea Presidential Chief of Staff: Heading to Canada to discuss submarine project; believes winning Canada submarine project will be worth KRW40.0T.

- South Korea to build the 2 nuclear power plants (as scheduled) - Yonhap.

- Korea Exchange: To launch pre and after-market trading on June 29th.

- Bank of Korea sells KRW vs. KRW600B indicated in 3-month Monetary Stabilization bonds (MSB): Yield: 2.430%.

- South Korea foreign currency deposits rise for the 2nd straight month in Dec to record high; cites BOK data - Yonhap.

Other Asia

- (SG) SGD rises to the highest level since Oct 2014 (**Reminder: Singapore Central Bank (MAS): To issue monetary policy statement on Jan 29th [Thurs]).

- (TH) Thailand TFEX: Temporarily halts trading of Silver online FUTs and USD/JPY FUTs.

- (TH) Thailand sells THB20B in 6-month bills: Avg Yield: 1.12134%; bid-to-cover: 2.31x.

- (TW) Taiwan Central Bank (CBC) Gov: No near-term use of FX reserves for firms' US investment.

- (MM) Myanmar military proxy expected to win 'landslide' in election (as expected).

- (ID) Indonesia lawmakers are expected to approve Thomas Djiwandono as new board member of the Indonesia Central Bank (BI).

North America

- (CA) Trump threatens 100% tariff against Canada if it makes a trade deal with China - Truth Social (weekend update).

- (US) United States Completes Withdrawal from World Health Organization (WHO)- (US) Natural Gas FUTs +16%.

- (US) Department of Energy (DOE): Today issued 2 emergency orders to mitigate blackouts in New England and Texas amid winter storm Fern.

- (US) Trump Administration to invest $1.6B into rare earths group.

- (US) President Trump: That is why I am hereby calling on Governor Walz, Mayor Frey, and EVERY Democrat Governor and Mayor in the United States of America to formally cooperate with the Trump Administration to enforce our Nation’s Laws, rather than resist and stoke the flames of Division, Chaos, and Violence.

- (US) Senate GOP leaders moving ahead with funding package - Punchbowl.

- NIH Proposes Embryonic Stem Cell Research Shift to Put Patients First.

Europe

- (EU) India to cut tariffs on cars to 40% as part of trade deal with the EU - financial press [update].

- (UR) Ukraine Pres Zelenskiy: Trilateral talks with US and Russia were constructive; Further meetings might take place next week.

Levels as of 00:20 ET

Nikkei 225 +2.06%; ASX 200 +0.13%; Hang Seng -0.22%; Shanghai Composite +0.06%; Kospi -0.90%.

Equity S&P500 Futures -0.27%; Nasdaq100 -0.40%; DAX +0.18%; FTSE100 -0.07%.

EUR 1.1898-1.1728; JPY 155.35-153.81; AUD 0.6933-0.6907; NZD 0.5976-0.5948.

Gold +1.55% at $5,060/oz; BTC -1.40% at $87,772, Crude Oil +0.08% at $61.11/bbl; Copper -0.21% at $5.9348/lb.