The US dollar, after rallying last week, experienced a pullback today, with most movements confined within the range established on Thursday and Friday. However, the Japanese yen remains an outlier among G10 currencies, continuing to weaken against the greenback. This comes despite Bank of Japan Governor Ueda reaffirming plans to raise interest rates if economic conditions and inflation align with expectations.
In the Asia-Pacific region, most major equity markets ended lower, reflecting cautious investor sentiment. In Europe, the Stoxx 600 index showed modest gains, while US futures indicated a positive tone. NASDAQ futures rose approximately 0.70%, and S&P 500 futures climbed nearly 0.50%.
Gold, which hit a two-and-a-half-week high before the weekend, has turned softer, approaching its January 2 low near $2,621. Meanwhile, February WTI crude oil extended its rally last week, reaching $74.25—the highest since early October. Today, oil is consolidating around the $75 mark, showing signs of stabilization.

Asia-Pacific Markets
Governor Ueda addressed a conference earlier, reiterating the BOJ's readiness to raise interest rates if economic growth and price conditions improve. This statement nudged Japanese government bond yields 2-3 basis points higher today. The swap market reflects expectations of an 11-basis-point hike at this month’s BOJ meeting.
Japanese officials also issued stronger verbal warnings regarding currency movements. However, direct intervention in the forex market seems unlikely in the near term. The dollar-yen pair continues to consolidate within the JPY 156–158 range, probing the upper boundary.

European Markets
The euro dipped to $1.0225 on the first trading day of the year, marking a two-year low. It rebounded slightly ahead of the weekend and gained further ground today. However, resistance near the January 2 high of $1.0375 has capped its advance.
In the UK, the British pound found renewed demand despite lingering concerns over the weak economic outlook. Sterling rose to $1.2490 during early European trading, showcasing resilience amid broader uncertainties.

American Markets
The US dollar traded lower today as it gave back some of last week’s gains. This week’s focal point is the employment report, due Friday. Bloomberg's median forecast anticipates 160,000 new jobs. Notably, Fed Chair Jerome Powell recently acknowledged overestimations in previous employment growth figures.
Additionally, Wednesday’s release of the FOMC minutes could offer insights into the Fed’s evolving focus on price stability. A weaker-than-expected jobs report may pose challenges to the Fed’s stance, potentially complicating its policy trajectory.