Posts from the 'Op-Ed' Category

The Trump effect: Steel tariffs, Bitcoin surge, and the future of crypto in Japan and beyond

The Trump effect: Steel tariffs, Bitcoin surge, and the future of crypto in Japan and beyond

Global financial markets are navigating a complex landscape shaped by geopolitical tensions, domestic policy shifts, and the ever-evolving dynamics of technological innovation. President Donald Trump’s recent pledge to impose tariffs on all steel and aluminium imports has sent ripples through global markets, exacerbating already jittery sentiments about trade tensions.

This policy announcement, with broader economic indicators and the rise of cryptocurrency-related developments, presents a multifaceted scenario that demands careful analysis. As a journalist committed to rigorous research and factual reporting, I aim to unpack these developments, offering a comprehensive view of their implications while critically examining the narratives surrounding them.

President Trump’s announcement of a 25 per cent tariff on steel and aluminium imports has undoubtedly heightened global risk sentiment. This move, which Trump did not specify regarding its effective date, has added a layer of uncertainty to an already tense economic environment. Commodity currencies such as the Australian and Canadian dollars have felt the immediate impact, depreciating as markets react to the potential for escalated trade conflicts.

Similarly, Asian equities have experienced declines, reflecting broader concerns about the ripple effects of these tariffs on global supply chains and economic stability. The timing of this announcement, just before Federal Reserve Chair Jerome Powell’s semiannual congressional testimony, further amplifies its significance as investors and policymakers alike scrutinise the potential monetary policy responses to these trade developments.

In the United States, financial markets have responded with caution and resilience. The MSCI US index edged lower by 0.9 per cent, with the Energy sector outperforming despite broader market declines. This resilience in the Energy sector can be attributed to relatively stable oil prices, with Brent crude hovering around US$75 per barrel, even as markets weigh the implications of the new tariffs.

Meanwhile, US Treasury yields have risen, with the 10-year yield increasing by 6.1 basis points to 4.49 per cent and the two year yield climbing by 7.8 basis points to 4.29 per cent. These movements suggest a market expectation of tighter monetary policy or heightened inflationary pressures, possibly in response to the tariffs. The US Dollar Index has held firm, gaining 0.3 per cent, while gold prices continue their upward momentum, approaching US$2,900 per ounce, as investors seek safe-haven assets amid uncertainty.

Across the Pacific, Asian equities have displayed a mixed performance, with early trading reflecting the cautious sentiment pervasive in global markets. However, US equity index futures suggest a modestly optimistic opening, implying a 0.3 per cent higher start for US stocks. This divergence highlights the nuanced reactions across different markets, shaped by local economic conditions and the varying degrees of exposure to US trade policies.

In Singapore, for instance, DBS Group Holdings Ltd. shares reached a record high, buoyed by the announcement of an investor payout plan. This development underscores the resilience of certain financial institutions in Southeast Asia, even as broader market sentiments remain tentative.

Markets on edge as jobs data, currency shifts, and crypto milestones shape the week

Amid these traditional financial market dynamics, the cryptocurrency space has emerged as a significant focal point, particularly in Asia. The Korea Exchange chairman’s push for the adoption of cryptocurrency exchange-traded funds (ETFs) reflects a growing recognition of digital assets as a potential driver of market growth.

South Korea, a nation known for its technological innovation and significant cryptocurrency adoption, stands at a critical juncture. Embracing crypto ETFs could position the country as a leader in this burgeoning financial sector, potentially attracting substantial foreign investment and fostering innovation. However, this move also carries risks, including regulatory challenges and the inherent volatility of digital assets, which could undermine financial stability if not managed carefully.

The meteoric rise of Metaplanet Inc., a Japanese company that has pivoted from hotel management to Bitcoin investment, exemplifies the transformative potential of cryptocurrencies. Shares of Metaplanet have soared by over 4,000 per cent in the past year, making it the top-performing stock among Japanese equities and one of the highest globally. This extraordinary performance is largely attributed to the ripple effects of President Trump’s pro-crypto agenda, which has fuelled a surge in Bitcoin demand in Japan.

Metaplanet’s strategic shift to adopting Bitcoin as a primary treasury reserve asset, inspired by the playbook of MicroStrategy’s Michael Saylor, has resonated with investors, particularly in a context where traditional financial assets are facing heightened uncertainty. The company’s ambitious plans to acquire 21,000 Bitcoin by 2026, supported by a US$745 million capital raise, further underscore its commitment to this strategy, positioning it as a potential leader in Asia’s cryptocurrency landscape.

However, this rapid ascent is not without its complexities. The volatility of Bitcoin, which recently hit a record high of US$109,241 before partially retracing, poses significant risks for companies like Metaplanet. Moreover, the high capital gains taxes on direct Bitcoin purchases in Japan—up to 55 per cent—make investing in stock proxies like Metaplanet an attractive alternative for small-scale and first-time buyers, particularly through programs like the Nippon Individual Savings Account. This tax structure, combined with the broader market dynamics influenced by Trump’s trade policies, creates a unique environment where investors navigate traditional and digital asset markets with heightened caution.

President Trump’s apparent obsession with cryptocurrencies, evidenced by his administration’s pro-crypto stance, has broader implications for global financial markets. Some analysts argue that Trump’s pledge to overhaul US financial regulations could present opportunities for the UK to lead in the crypto space in the United Kingdom. With its robust financial infrastructure and history of regulatory innovation, the UK is well-positioned to capitalise on any shifts in US policy that might create regulatory gaps or opportunities.

However, this optimism must be tempered by critically examining the challenges involved, including the need for robust regulatory frameworks to protect investors and ensure market stability. The UK’s ability to lead in this space will depend on its capacity to balance innovation with prudent oversight, a task made more complex by the global nature of cryptocurrency markets.

The new norm: Stabilising global risk sentiment in a volatile market

From my perspective, the interplay between traditional financial markets and the cryptocurrency sector underscores a broader shift in the global economic landscape. President Trump’s tariffs on steel and aluminium, while aimed at protecting domestic industries, risk exacerbating global trade tensions and economic uncertainty.

This uncertainty, in turn, drives investors toward alternative assets like gold and Bitcoin, which are perceived as hedges against traditional market volatility. However, the rapid rise of companies like Metaplanet and the push for crypto ETFs in South Korea highlights the transformative potential of digital assets, even as they introduce new risks and regulatory challenges.

Critically examining the establishment narrative, it is essential to recognise that the enthusiasm for cryptocurrencies, particularly in the context of Trump’s policies, is not without its pitfalls. The volatility of digital assets, the potential for regulatory overreach, and the risk of market manipulation are significant concerns that must be addressed.

Moreover, the reliance on Bitcoin as a treasury reserve asset, as seen with Metaplanet, raises questions about long-term sustainability and the broader implications for corporate governance and financial stability. While the allure of high returns is undeniable, the risks associated with such strategies cannot be overlooked.

In conclusion, the current global financial landscape is a tapestry of interconnected developments, from traditional trade policies and market dynamics to the disruptive potential of cryptocurrencies. President Trump’s tariffs on steel and aluminium have heightened global risk sentiment, driving investors toward safe-haven assets and alternative investments like Bitcoin.

Meanwhile, the rise of Metaplanet in Japan and the push for crypto ETFs in South Korea reflect the growing influence of digital assets in shaping economic strategies. As these trends unfold, policymakers, investors, and journalists alike must approach them with a critical eye, balancing optimism with a rigorous assessment of the risks and opportunities they present.

The future of global finance will likely be defined by how effectively we navigate these complexities, ensuring that innovation is harnessed responsibly and sustainably.

 

Source: https://e27.co/the-trump-effect-steel-tariffs-bitcoin-surge-and-the-future-of-crypto-in-japan-and-beyond-20250210/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Markets on edge as jobs data, currency shifts, and crypto milestones shape the week

Markets on edge as jobs data, currency shifts, and crypto milestones shape the week

7 February 2025 marks a pivotal moment for global markets as investors grapple with a confluence of critical economic indicators, shifting currency dynamics, and transformative developments in the cryptocurrency space. Wall Street traders are on edge, awaiting the release of US non-farm payroll data that could illuminate the Federal Reserve’s next move on interest rates, while the Japanese yen surges to its highest level since early December, buoyed by hawkish comments from a Bank of Japan official.

Meanwhile, Amazon’s disappointing profit projections send ripples through after-hours trading, and the cryptocurrency market sees increased institutional engagement alongside significant regulatory milestones. As a journalist deeply attuned to the pulse of global finance, I believe this week underscores the intricate balance between risk and opportunity, with profound implications for investors, policymakers, and the broader economy.

Let’s begin with the US jobs data, which has become the focal point for Wall Street traders. The non-farm payroll report is more than just a snapshot of employment trends; it is a critical barometer for the Federal Reserve’s monetary policy trajectory. A weak print could reignite expectations for further interest rate cuts, providing a much-needed boost to risk assets and potentially alleviating some of the pressure on equity markets.

Conversely, a stronger-than-expected report might temper hopes for additional easing, reinforcing the Fed’s cautious stance on inflation. The stakes are high, particularly as Wall Street also anticipates a revision to previous job growth figures—a development that could further complicate the Fed’s decision-making process.

The interplay between these data points highlights the fragility of the current economic recovery, with markets hanging on every decimal point. From my perspective, the Fed faces an unenviable task: balancing the need to support growth while guarding against inflationary pressures. A misstep here could have profound consequences, not just for the US economy but for global financial stability.

The new norm: Stabilising global risk sentiment in a volatile market

Beyond the jobs data, the broader US market landscape offers mixed signals. The MSCI US index edged higher by 0.4 per cent, with the Consumer Staples sector outperforming at 0.9 per cent. This resilience in defensive sectors suggests that investors are hedging their bets, seeking safety amid uncertainty.

At the same time, US Treasury yields ticked upward, with the 10-year yield rising by 1.6 basis points to 4.43 per cent and the 2-year yield climbing by 2.5 basis points to 4.21 per cent. These modest increases reflect a market grappling with the potential for higher interest rates, even as the US Dollar Index consolidated its recent losses with a slight 0.1 per cent uptick.

Gold, often seen as a safe-haven asset, saw its upward momentum persist, albeit with a slight 0.4 per cent pullback, as it continued its march toward the US$2,900 per ounce mark. These movements paint a picture of a market in flux, with investors seeking refuge in traditional safe havens while cautiously navigating the shifting sands of monetary policy.

On the global stage, the Japanese yen’s appreciation to its highest level since early December is a development worth noting. The currency’s gains were spurred by comments from Bank of Japan (BOJ) board member Naoki Tamura, who made a compelling case for higher interest rates. This hawkish stance contrasts sharply with the BOJ’s historically dovish policies, signaling a potential shift in Japan’s monetary strategy. The yen’s strength is a double-edged sword: while it bolsters the purchasing power of Japanese consumers and importers, it poses challenges for exporters and could dampen economic growth.

From my vantage point, Tamura’s comments are a bold move, reflecting the BOJ’s growing confidence in Japan’s economic recovery. However, the central bank must tread carefully, as premature rate hikes could undermine the fragile progress made in combating deflation. The yen’s appreciation also has broader implications for global currency markets, potentially influencing the relative strength of the US dollar and other major currencies.

Shifting gears to the commodity markets, Brent crude oil hovered just below US$75 per barrel, weighed down by concerns over President Trump’s proposed tariffs on China. These tariffs, if implemented, could reduce global crude demand, particularly from one of the world’s largest oil consumers. At the same time, Trump’s pledge to boost US oil output adds another layer of complexity, potentially offsetting the impact of sanctions on Iran. This delicate balance between supply and demand dynamics underscores the geopolitical risks embedded in the oil market.

As a journalist, I find it striking how political decisions in one corner of the world can ripple through global commodity markets, affecting everything from energy prices to inflation expectations. The mixed performance of Asian equities and the flat outlook for US equity index futures further highlight the uncertainty permeating global markets, as investors grapple with these intersecting forces.

Turning to the cryptocurrency space, this week brought several notable developments that reflect the sector’s growing maturity. JP Morgan’s latest eTrading survey revealed a significant uptick in institutional engagement with cryptocurrencies, with 13 per cent of the 4,200 surveyed institutional traders actively trading digital assets, up from nine per cent in 2024.

This increase aligns with the launch of US Bitcoin ETFs in January 2024 and the remarkable 120 per cent surge in Bitcoin prices over the course of the year. The contrast with 2023, a period marked by the fallout from the FTX collapse, is stark. The recovery and subsequent growth in 2024 underscore the resilience of the crypto market and its ability to attract institutional capital.

However, it’s worth noting that 71 per cent of surveyed traders still have no plans to trade cryptocurrencies, down from 78 per cent the previous year. This cautious stance suggests that while the crypto market is gaining traction, significant barriers to adoption remain, including regulatory uncertainty and concerns about volatility.

What startup should I start based on market trends in 2025?

The survey also highlighted the relative importance of various technologies, with artificial intelligence extending its dominance, followed by APIs. Blockchain, while still a distant third at six per cent (down from seven per cent last year), remains a critical technology for the crypto ecosystem. The decline in blockchain’s perceived importance is intriguing, particularly in light of the SEC’s recent launch of a Crypto Task Force website aimed at clarifying regulations for digital assets.

This initiative, which focuses on token classification and compliance, is a step in the right direction, providing much-needed guidance for market participants. Similarly, Franklin Templeton’s bid to launch a new crypto index ETF signals growing institutional interest in diversified crypto exposure. These developments are emblematic of the broader trend toward mainstream acceptance of digital assets, even as challenges persist.

In my view, the cryptocurrency market is at a pivotal moment. The increased institutional engagement and regulatory clarity are positive signs, but the sector must continue to address concerns about transparency, security, and systemic risk. The lessons of the FTX collapse and other high-profile failures must not be forgotten.

As the crypto ecosystem evolves, it will be crucial for regulators and industry players to work collaboratively to build a framework that fosters innovation while protecting investors. The golden age of crypto, as some have dubbed it, is within reach, but it will require careful navigation of the complex interplay between technology, regulation, and market dynamics.

To conclude, this week’s developments paint a picture of a global financial landscape marked by uncertainty and opportunity. From the anticipation surrounding US jobs data to the yen’s resurgence and the evolving dynamics in the cryptocurrency space, the forces shaping markets are multifaceted and interconnected.

As a journalist, I remain cautiously optimistic about the future, but I am mindful of the risks that lie ahead. The path forward will require vigilance, adaptability, and a commitment to balancing innovation with stability. The global economy stands at a critical juncture, and the decisions made in the coming months will reverberate for years to come.

 

Source: https://e27.co/markets-on-edge-as-jobs-data-currency-shifts-and-crypto-milestones-shape-the-week-20250207/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

The new norm: Stabilising global risk sentiment in a volatile market

The new norm: Stabilising global risk sentiment in a volatile market

February 6, 2025: We’ve recently witnessed a stabilisation of risk sentiment following a tumultuous week marked by volatile price action. Despite the tech sector’s underwhelming earnings, the MSCI US index managed to eke out a modest gain of 0.4 per cent, buoyed by a broader rally across other sectors. This resilience in the face of disappointing tech earnings speaks volumes about the current market dynamics, where diversification across sectors seems to be paying dividends.

The week’s economic data provided a mixed bag of signals. The US ISM services data, which fell unexpectedly to 52.8 against a consensus forecast of 54.1, sent ripples through the financial markets. This decline in service sector activity led to a significant drop in US Treasury (UST) yields, with the 2-year yield softening by three basis points to 4.19 per cent and the 10-year yield dropping eight basis points to 4.42 per cent.

This adjustment in yields reflects a cautious optimism among investors, perhaps taking some comfort in the narrowing of the 10s2s yield curve, which tightened by another 6 basis points to 23 basis points. This movement in the yield curve suggests that while the market anticipates no immediate rate hikes, the long-term outlook might be less hawkish than previously thought.

Amidst this backdrop, the voices from the Federal Reserve, including Jefferson, Barkin, and Goolsbee, maintained a steady drumbeat of “no rush on rate cuts,” although Goolsbee struck a surprisingly hawkish tone, cautioning about inflation risks stemming from potential tariffs.

This nuanced shift in narrative was further complicated by comments from Treasury Secretary Scott Bessent, who indicated that the Trump administration’s focus on reducing borrowing costs would target the 10-year Treasury yields rather than the Fed’s short-term rates. This policy direction could have profound implications for long-term investment strategies and the broader economic landscape.

The US Dollar Index, reflecting these shifts in economic policy and investor sentiment, fell by 0.4 per cent, reaching its lowest point in over a week. This decline was partly due to receding fears of a global trade war, which also influenced currency pairs like USD/JPY, dropping from 154.50 to 152.50 after Japan reported stronger-than-expected wage growth, sparking speculation of another Bank of Japan rate hike.

Gold, often seen as a safe-haven asset, continued its bull run, climbing to a new high of US$2,865 per ounce. This surge was fuelled not only by the general risk-off sentiment but also by fears that higher tariffs might extend to precious metals and commodities imports from the UK and the European Union.

Conversely, Brent crude oil prices fell by 2.1 per cent after an EIA report highlighted an increase in crude oil inventories, adding to the overhang of geopolitical risks in the oil market.

Looking at the equity front, Asian markets took their cues from Wall Street, opening higher, while US equity futures suggested a positive start for American stocks, indicating a potential continuation of the stabilisation trend.

The week wasn’t just about traditional markets; significant strides were made in the digital asset space. White House Crypto Czar David Sacks announced that the first priority for the administration would be stablecoin legislation. This move comes at a time when stablecoins, despite their popularity mainly overseas, have yet to find a clear regulatory path in the US The establishment of a Crypto Task Force, with SEC Commissioner Hester Peirce at the helm, aims to carve out a regulatory framework that balances innovation with investor protection.

The task force’s agenda is ambitious but necessary. It seeks to eliminate the regulatory ambiguity that has long plagued the crypto industry, where businesses operate under the shadow of potential legal repercussions without clear guidelines. Commissioner Peirce emphasised in her statement that the SEC’s initiative isn’t an endorsement of any crypto asset but rather an effort to provide a regulatory environment that makes sense for crypto while safeguarding investors from fraudulent schemes. The focus on stablecoins is particularly pertinent, given their role in providing liquidity and stability within the volatile crypto market.

This regulatory push could potentially be legislated within six months, according to Sacks, which is a bold timeline considering the complexities involved. Yet, it signals a significant shift towards integrating cryptocurrencies into the mainstream financial system, recognising their potential while addressing the inherent risks.

In conclusion, this week’s market movements reflect a broader narrative of stabilisation amidst volatility, driven by economic data, policy signals, and geopolitical developments. The focus on stablecoin regulation could be a game-changer for the crypto market, potentially fostering an environment where digital assets can thrive under a clearer legal framework.

However, the journey towards such stability in both traditional and digital markets is fraught with challenges, requiring a delicate balance between fostering innovation and ensuring economic and financial integrity. As we move forward, the interplay between market sentiment, regulatory actions, and global economic policies will continue to shape our financial landscape in unpredictable but potentially rewarding ways.

 

Source: https://e27.co/the-new-norm-stabilising-global-risk-sentiment-in-a-volatile-market-20250206/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j