Stocks Rally on Fed Rate-Cut Buzz as Yen Weakens After Ishiba’s Resignation
Global stock markets started the week on a strong note as hopes grew that the Federal Reserve (Fed) will cut interest rates soon. Investors now believe the Fed could lower rates by 25 to 50 basis points this month after weak U.S. jobs data suggested the economy is slowing. Lower rates usually support equities by making borrowing cheaper, and this helped major indexes move higher.
At the same time, U.S. Treasury yields slipped to their lowest levels in five months, signaling stronger demand for bonds. In commodities, gold prices remained close to record highs near $3,588 per ounce.
As traders continued to buy the metal as a safe-haven against inflation risks and economic uncertainty. Oil prices also climbed after OPEC+ agreed to slow down its planned production increases from October, supporting the market outlook.
In Asia, the focus was on Japan. The Japanese yen dropped sharply, sliding about 0.6% to 148.4 per dollar, after Prime Minister Shigeru Ishiba announced his resignation. His exit created new political uncertainty and raised questions about the future of Bank of Japan (BoJ) policy. Investors are now watching closely to see who will succeed him. Candidates like Sanae Takaichi, who is seen as favoring loose fiscal and monetary policy, could further influence yen weakness in forex trading.
Elsewhere, the euro and British pound (GBP) slipped slightly against the dollar, while traders stayed cautious ahead of key central bank meetings later this week.
Impact:
Global stocks might rise further if the Fed confirms a rate cut. The yen could weaken more if political uncertainty continues, possibly driving more forex market volatility.
