Asian FX is splitting fast in mid-January 2026, with clear winners and losers emerging. The yen is back under pressure, sliding to around 159 per dollar as traders price in looser fiscal and monetary risks tied to snap-election chatter, sharp enough to revive intervention talk as officials warn against “excessive” swings and markets fixate on the 160 level. The Korean won is also wobbling in the upper 1,400s per dollar, dragged lower by one-way dollar demand from outbound securities investment despite solid external balances, and that weakness is now boxing in the Bank of Korea by lifting imported-inflation risks and shrinking room for rapid rate cuts. A relative bright spot is the Malaysian ringgit, which opened 2026 stronger on a softer U.S. dollar, showing greater resilience even as regional volatility stays high.
EQUITY
Wall Street darlings have fallen out of favour as the tech-heavy Nasdaq leads the market decline along with financial stocks after concerns over U.S. President Donald Trump’s proposed cap on credit card interest rates. Investors rotated into defensive sectors like consumer staples and energy, while small-cap hit a record high, outperforming the S&P 500 for the ninth consecutive session.
GOLD
Gold held prices near record highs around $4,600 after surpassing the previous high at $4,550 Monday, further supported by lower U.S. producer and consumer inflation data, though strong retail sales and caution among policymakers tempered outright dovish sentiment. Price analysis shows that the metal’s rally faced a mild pullback due to technical corrections and profit-taking, yet fundamental remained solid with tight geopolitical tensions involving Iran and Eastern Europe.
OIL
Oil prices ended flat after President Trump signalled de-escalation by pointing out a decline in Iran’s crackdown on protesters, previously the main catalyst for a multi-month high rally. Experts argue this crisis feels distinct from past flare-ups due to Iran’s growing role in global oil logistics. Analysts suggest that with the U.S. now the world’s top oil producer and no actual supply cuts yet from Iran, recent price moves reflect risk premiums rather than fundamental shortages.
CURRENCY
The U.S. dollar is consolidating, stabilizing near 99.20, supported by an optimistic Fed Beige Book that highlighted a “slight to modest” pickup in economic activity and stronger data on retail sales, producer prices, and existing home sales. Meanwhile, the yen made a rebound, suspecting government intervention.
