Japan Just Shook Global Markets 🇯🇵

Welcome back to the the Day Trading newsletter 📈 

Markets are digesting a lot this week. Japanese stocks hit record highs after a historic election, the Dow is holding above 50,000, and all eyes are on the delayed jobs and inflation data finally coming this week.

Let’s get into it 👇️ 

🔼 The Dow closed above 50,000 for the first time ever on Friday and held those gains through Monday's session. Industrials and financials continue to outperform as money rotates away from mega-cap tech (Reuters)

🇨🇳 China's regulators are reportedly urging banks to scale back holdings of U.S. Treasuries, citing concentration risk and volatility concerns. Mainland China's Treasury holdings have dropped 11% over the past year to $682.6 billion (Reuters)

📈 Bitcoin rebounded sharply from last week's flash crash to $60,000, clawing back above $71,000 by Monday. The brutal selloff wiped out all gains since the November election, but forced deleveraging appears to have stabilized (Yahoo Finance)

📉 Upwork plunged 22% after reporting active clients dropped to 785,000 from 832,000 a year ago. The freelance marketplace also guided Q1 revenue below consensus, signaling the gig economy slowdown continues (CNBC)

Prime Minister Sanae Takaichi just secured something rare in Japanese politics: a mandate.

Her ruling LDP coalition swept to a two-thirds supermajority in Sunday's snap election, giving her the power to override the upper house and push through her agenda without compromise.

Markets wasted no time reacting. Japanese stocks surged to record highs Monday, with the Nikkei blowing past 56,000. The yen initially weakened on expectations of aggressive fiscal stimulus, but stabilized after Tokyo issued a warning about potential currency intervention.

What does "Sanaenomics" mean in practice?

Expect bigger defense budgets, critical infrastructure spending, and a "responsible proactive fiscal policy" that will test Japan's bond market.

Strategists now expect three BOJ rate hikes this year instead of two, as the central bank gets more room to normalize policy.

The ripple effects extend beyond Tokyo.

Japan is the largest foreign holder of U.S. Treasuries, and any shift in its bond market dynamics can push yields higher globally.

Takaichi's win also strengthens the U.S.-Japan alliance at a critical moment for regional security, with analysts at Goldman Sachs noting increased focus on defense and "U.S. re-industrialization" themes.

 RATE TODAY’S EDITION

⚠️ Disclaimer: Not financial advice. Do your research before making any trades.