Yen Sways Amid Intervention Speculation, As Global Markets Weigh Trump's Greenland Stance

The yen experienced volatility amid speculation of Japanese intervention to support the currency. Global stocks remained subdued following President Trump's stance on Greenland. The Bank of Japan indicated potential rate hikes against this political backdrop, while investors kept a cautious eye on U.S.-Europe tensions and developments in the Ukraine conflict.

The Japanese yen experienced significant fluctuations on Friday as market participants speculated about possible intervention by Japanese authorities to support the currency. The Bank of Japan signaled its readiness to continue raising borrowing costs, despite a politically charged environment ahead of a snap election. This development came as global stocks remained largely subdued after a brief rally following U.S. President Donald Trump's softer stance regarding Greenland.

Global markets have been volatile, with investors uneasy over the U.S. and Europe's diplomatic tensions. Nonetheless, Trump's decision to hold off on imposing trade tariffs and avoiding aggression towards Greenland slightly boosted global stock performance while European stocks dipped and Wall Street futures pointed to modest declines. Market observers, including Marie de Leyssac from Edmond de Rothschild Asset Management, noted the unpredictable political landscape as a source of caution for investors, particularly those holding U.S. assets.

In commodities, oil prices rebounded with Brent crude futures rising by 1.7% amid renewed U.S.-Iran tensions. Gold hit a record high before seeing a minor correction. Meanwhile, the U.S. dollar maintained strength against a basket of currencies, despite recent setbacks. Investors are also closely monitoring potential progress in U.S.-brokered discussions concerning the Ukraine conflict, reflecting how geopolitical factors continue to shape market dynamics.

(With inputs from agencies.)