Wild Day on Wall Street

The stock market declined sharply October 10^th, due to escalating trade tensions between the U.S. and China.  President Trump warned of a "massive increase" in tariffs on Chinese imports, reigniting fears of a trade war that unsettled global markets earlier this year.  This uncertainty caused major indices like the S&P 500 to decline 2.7% and Nasdaq to fall 3.5%, the largest decreases since April 2025.

That’s not the only factor contributing to the decline.  The ongoing U.S. government shutdown is entering its tenth day, which has delayed key economic data releases and increased investor uncertainty.  Consumer sentiment remains weak, influenced by concerns about jobs and inflation, further dampening market confidence.  Investors are cautious ahead of the upcoming earnings season and strikes a risk-averse tone in the market.

But wait, there’s more…

Today Japan’s ruling coalition collapsed as the junior political party, Komeito, quit the alliance, putting the confirmation of Sanae Takaichi as Japan's first female prime minister in jeopardy. This political instability threatens governance continuity in Japan, a major global economy and key U.S. ally, raising concerns among international investors and regional players like China.

Given Japan's significant role in global trade, finance, and regional security, this political crisis is being closely watched.  The instability could affect global markets through investor caution, currency volatility (such as in the Yen), and uncertainties in Asia-Pacific geopolitics, especially with ongoing tensions involving China and North Korea.

While the Japanese Yen is holding steady on the news, that may not last – putting the struggling Yen carry trade at further risk.  As of October 10, 2025, the Japanese yen is trading around 152 Japanese yen per 1 US dollar, or equivalently, about 1 Japanese yen equals 0.00657 US dollars. The yen has weakened by roughly 3.3% over the past month against the dollar and is down about 2.3% over the last year.  Recent volatility reflects factors including Japan's political instability and global market uncertainty.

Intraday today, the USD/JPY exchange rate has seen a slight decline, falling about 0.29% to trade near 152.60 yen per US dollar. The pair touched a high around ¥153.24 earlier but retraced as some profit-taking and safe-haven demand for the yen emerged amid global risk aversion.  The intraday activity shows consolidation below the ¥153.26 level, with technical support near ¥149.95 and resistance around ¥153.70-153.75. Overall, the USD/JPY remains in a neutral to mildly bearish intraday bias but still within a larger bullish trend from the 2021 lows.

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