Japan’s national Consumer Price Index, excluding fresh food, rose by 2.9% year-on-year in September. This increase aligns with market expectations for the period.

Elsewhere, currency markets saw the Australian dollar drop as the US dollar strengthened in anticipation of upcoming US CPI data. The USD/CAD pair rose above 1.4000 due to increased risk aversion and weakened oil prices. In metals, gold prices stalled near $4,100 amid a stronger US dollar and higher Treasury yields as traders awaited US-China trade talks and US CPI figures.

Cryptocurrency Trends

In the cryptocurrency market, Ethereum whales, holding 10K-100K ETH, have continued accumulating despite weak on-chain metrics, amassing over 200K ETH since the weekend. Meanwhile, Aster saw its price rise slightly above $1.00, reflecting a positive sentiment in the broader crypto market.

Regarding global economic developments, the Japanese yen steadied following the appointment of Sanae Takaichi as Japan’s new Prime Minister. This appointment has caused the market to consider the possible impact of Japan’s fiscal policy and monetary changes. Additionally, China’s state planner announced intentions to implement some major investment projects.

Japan’s September inflation hitting 2.9% confirms that sticky prices are now the norm, a trend we have been tracking since the persistent inflation prints seen throughout 2024. While this number met forecasts and didn’t shock the market, it puts enormous pressure on the Bank of Japan to act. This steady inflationary pressure, combined with a new Prime Minister, suggests a major policy shift is no longer a question of if, but when.

With Sanae Takaichi’s government in place, we must seriously consider the end of yield curve control before the year is out. Her administration’s talk of fiscal expansion alongside the Bank of Japan’s need for monetary normalization creates a powerful dynamic for a stronger yen. This makes buying put options on the USD/JPY an attractive strategy to position for a sudden, and potentially sharp, move in the currency.

Global Market Focus

Globally, the market is completely fixated on the upcoming US CPI data, which is forecast to be around 3.1%. As we have seen repeatedly over the past 18 months, any upside surprise in US inflation data immediately strengthens the US dollar and weighs on risk assets. Trading volatility through straddles on major indices or currency pairs like the EUR/USD ahead of the announcement could prove profitable.

We are also seeing a clear divergence in commodities, with gold holding strong above $4,100 while WTI crude oil is weak near $61 a barrel. This pattern, which became more pronounced in early 2025, signals a clear flight to safety and a lack of faith in global economic growth. Call options on gold futures or related ETFs offer a direct way to leverage this ongoing market anxiety.

The flight to safety is further evidenced by USD/CAD pushing above 1.4000, as risk aversion and lower oil prices punish the Canadian dollar. This is reminiscent of the market jitters we experienced in mid-2024, which often preceded broader market downturns. Hedging portfolios with put options on major equity indices should be a primary focus in the weeks ahead.

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