Weak Yen Concerns, New BRICS Member, and US-China Economic Tensions: Latest Developments in Global Markets
Global markets have started the first month of 2025 with significant developments in diplomacy and economics. Topics ranging from Japan to the US, the expansion of BRICS, and energy markets are capturing the attention of investors and analysts. Fluctuations in currency markets, international collaborations, and innovations in the technology sector are the main agenda items.
Warning from Japan on weak yen Japanese Finance Minister Katsunobu Kato issued another warning against speculative sales following the yen's decline to its lowest level against the dollar in five months. In a press conference, Kato stated, "The Japanese government is concerned about currency developments, including those driven by speculators, and will take appropriate measures against excessive movements." He emphasized that currency movements should reflect fundamentals, adding that the government would intervene if excessive volatility occurs. The yen has depreciated by 5.35% against the dollar, reaching a USD/JPY exchange rate of 157.83. Experts suggest that the Japanese government may tighten market interventions and take steps to stabilize the yen.
New BRICS member: Indonesia Brazil announced that Indonesia has officially joined BRICS during its presidency in 2025. Indonesia, the world's fourth-most populous country, had previously expressed its desire to join BRICS to enhance emerging economies and advance the Global South's interests. Brazil stated that member countries approved Indonesia's participation at the 2023 Johannesburg summit. Indonesia's inclusion in BRICS is viewed as a significant step towards increasing economic cooperation and becoming a stronger player in global markets. The country is expected to participate in joint projects, particularly in infrastructure and energy sectors.
Critical meeting between the US and China US Treasury Secretary Janet Yellen held a virtual meeting with Chinese Vice Premier He Lifeng. The meeting addressed macroeconomic developments and economic relations between the two countries. Yellen expressed concerns about China's non-market policies and industrial overcapacity, while highlighting the serious consequences China might face if it continues to support Russia. The meeting is seen as a step towards reducing long-standing trade tensions between the two countries. However, Yellen's strong remarks regarding China's cyber activities and market policies indicate that bilateral relations continue to face challenges.
Goldman Sachs' oil demand forecast Goldman Sachs Group (GS) forecasted that the cold snap in the US and Europe would increase daily oil demand by 0.1 million barrels in the upcoming week. It is noted that cold weather conditions could provide further support for energy prices. However, pressure on independent refineries in China is said to have lowered oil demand forecasts. Goldman Sachs emphasized the need to monitor geopolitical developments' impact alongside short-term price fluctuations in global energy markets.
Morgan Stanley's base metals analysis Morgan Stanley (MS) indicated that base metal prices could move in different directions over the coming months. Analysts expect an increase in copper and zinc prices while maintaining a neutral outlook for nickel and aluminum, and a cautious stance on lead. It is anticipated that supply tightness in copper and zinc will limit refined production, while the nickel market is said to be dependent on political developments in Indonesia. In the lead market, it is expected that last year's surplus will continue, putting downward pressure on prices.
Nvidia unveils new gaming chip NVIDIA (NVDA) introduced its GeForce RTX 50 series gaming chips for desktops and laptops at the CES 2025 event. CEO Jensen Huang noted that the new chips are equipped with AI-powered neural rendering and ray tracing technologies. Huang described this technology as the biggest advancement in computer graphics in the past 25 years. The new chips are expected to revolutionize AI and gaming performance, further strengthening Nvidia's leadership position in the industry.