Insights 
VT 
In November, Tokyo’s Consumer Price Index excluding fresh food rose by 2.8% year-over-year, surpassing the forecast of 2.7%. This suggests an increase in underlying inflation within the region.
The People’s Bank of China set the USD/CNY reference rate at 7.0789, slightly higher than the previous 7.0779. The NZD/USD holds near a monthly high around 0.5730, buoyed by the Reserve Bank of New Zealand’s hawkish stance.
Currency Movements and Inflation Trends
GBP/USD continues to rise, nearing 1.3250 amid expectations of US Federal Reserve rate cuts. Meanwhile, EUR/USD remains steady at approximately 1.1600 due to pressure on the Dollar.
Gold stabilised during the Asian session, with rising speculation on a December Fed rate cut supporting its value. Despite this, hopes for peace in Ukraine may restrict its gains.
Upbit experienced a $37 million loss due to a Solana wallet breach, prompting a temporary pause on transactions. UK markets show mixed movement following a budget assessment, as Thanksgiving impacted trading.
Ripple’s recovery remains weak despite a regulatory nod for the RLUSD stablecoin in the UAE, trading around $2.19. Attempts to break through resistance have faced challenges at key levels.
Opportunities and Strategies in Forex and Commodities
The higher-than-expected inflation data from Tokyo is a significant signal for us. At 2.8%, this continued price pressure increases the likelihood that the Bank of Japan will have to tighten its policy soon. This environment makes betting on a stronger yen increasingly attractive.
This Japanese development contrasts sharply with the situation in the United States, where the dollar is weakening. Markets are clearly expecting the Federal Reserve to cut interest rates next month. This is pushing other currencies like the British Pound and the Euro higher against the dollar.
We have watched Japan’s core inflation remain stubbornly above the 2% target for over a year now, through late 2024 and most of 2025. Looking at derivatives markets, the CME FedWatch Tool now shows an 85% probability of a Fed rate cut in December. This growing policy divergence between the US and Japan is the central theme to trade on.
Given this setup, the USD/JPY currency pair appears poised for a downward move. We should look at buying put options on USD/JPY to capitalize on a potential fall. This strategy allows us to profit from a strengthening yen while defining our maximum risk.
The weak dollar outlook also supports assets like gold. Lower US interest rates make the non-yielding metal more appealing. Therefore, buying call options on gold could serve as a valuable position in the coming weeks.
However, we must note the prevailing risk-on mood, which could cap immediate gains in safe-haven assets. We have seen the Bank of Japan hesitate to act in the past, a pattern that repeated itself throughout 2024. Any further delay from them could temporarily frustrate this trading view.
