Insights 
VT 
Foreign investment in Japanese stocks declined from ¥874 billion to ¥328.1 billion in January. This represents a considerable reduction compared to previous figures.
The US Federal Reserve kept interest rates unchanged at its January meeting, maintaining the Fed Funds Target Range at 3.50%-3.75%. This decision aligned with market expectations.
Forex Market Movements
In the forex markets, the USD/CHF pair fell to around 0.7650 amid concerns over US trade policy and Federal Reserve independence. The EUR/USD pair gained traction above 1.1950, with the US dollar weakening against the Euro due to economic policy uncertainties.
Gold prices continue to reach new record highs, briefly near $5,600, driven by geopolitical tensions and economic uncertainties. Meanwhile, various cryptocurrencies like Worldcoin, Canton, and Jupiter hold their gains even as the market sees corrections.
The technical outlook for some currency pairs, such as GBP/USD, suggests potential bearish reversals. Bittensor, an AI-related token, showed a positive sentiment, bouncing back above $240 with increasing retail interest in the derivatives market.
Please note, all information is intended for informational purposes only and should not be taken as financial advice. Always perform thorough research before making investment decisions.
Investment Strategies and Market Volatility
We’ve seen a sharp drop in foreign investment into Japanese stocks, which raises a red flag for the Nikkei’s recent rally. This comes after the index hit all-time highs back in 2024 and 2025, suggesting a potential top is forming. Traders should consider buying Nikkei 225 put options to hedge or speculate on a near-term correction.
The Federal Reserve’s decision to hold rates steady confirms the rate-cutting cycle we saw through much of 2025 is now on pause. With the Fed Funds rate down to 3.50-3.75% from its peak above 5% back in 2024, the interest rate advantage of the dollar has eroded. We should consider continuing to sell US Dollar Index futures or buying call options on pairs like AUD/USD, which is already testing multi-year highs.
Gold continues its powerful rally toward $5,600, fueled by the weaker dollar and ongoing global uncertainty. This is a continuation of the trend that began when prices broke past the old $2,100 resistance level back in early 2024. Long positions via gold futures or call options remain the primary strategy until we see a significant reversal signal.
Given the mix of a paused Fed, political uncertainty in Japan, and general geopolitical risk, we expect market volatility to pick up. After a period of relative calm that we saw for parts of 2025, the CBOE Volatility Index (VIX) is showing signs of life again. Buying VIX call options could be a cheap way to insure portfolios against a sudden market downturn in the coming weeks.
