Asian stocks hit record highs as a sliding yen fuels risk appetite, while investors eye U.S. bank earnings and a key inflation report for clues on the Fed’s rate path. Political uncertainty around Trump’s policy moves adds another layer of risk to global markets.

Yen's pain is Nikkei's gain as records tumble

January 13, 2026

Reuters

A woman stands in front of a screen displaying Japan's Nikkei share average after the Bank of Japan announced to raise interest rates outside a brokerage in Tokyo, Japan December 19, 2025.

Issei Kato/Reuters

A look at the day ahead in European and global markets from Wayne Cole.

Tokyo has returned from holiday with a bang, rising 3% to an all-time peak as investors welcome a weakening yen and the chance of even more aggressive fiscal stimulus. South Korea and Taiwan also hit records, while China scaled a four-year top.

Going the other way, the yen hit record lows on the euro and Swiss franc and multi-year troughs on a range of others. The shorting of the yen helped save the dollar's blushes as it climbed to 158.65 and steadied from Monday's wobble.

Tokyo officials duly stepped up their verbal protests against "one-sided" yen moves, underlining the risk of intervention in the 159.00 to 160.00 range. That just encourages speculators to short the yen against other currencies, including the AUD, MXN and BRL.

For Wall Street, earnings kick off today with JPMorgan Chase JPM.N and Bank of New York Mellon BK.N. High expectations mean there's a risk of disappointment if bank management guidance is not bullish.

There's an added wrinkle in Trump's sudden announcement that credit card rates will be capped at 10% from January 20, which took everyone by surprise. It's not even clear he has the legal power to do this, but it's not stopped him so far.

Banks, of course, warned such a step could result in millions of American households and small businesses losing access to credit. The crunch would essentially be a tightening in monetary policy, ironic given Trump is pressing so hard for the Fed to cut rates ever deeper.

The U.S. consumer price report poses a hurdle, with analysts warning of upside risks following November's unbelievably low result which was biased down by a lack of data collection.

Median forecasts are for core inflation to rise an annual 2.7% in December, but both JPMorgan and Goldman see 2.8% as some of the data distortions wash out. In fact, CPI will be biased downward until April when a reset in housing costs could see a spike.

The market has long given up on a January rate cut from the Fed, and even April is under 50%, but a high CPI could lessen the chance for June. 0#USDIRPR

As an aside, the Supreme Court has another opportunity on Wednesday to rule on Trump's emergency power tariffs, but it appears the justices don't usually make rulings this important so early in the year. April, or even June, seems more likely.

Oh and next Wednesday is when SCOTUS hears oral arguments on Trump's attempt to fire Fed Governor Lisa Cook.

Key developments that could influence markets on Tuesday:

- US Dec CPI, new home sales, weekly average earnings

Major US banks are set to report strong earnings growth https://reut.rs/4stt1Wg

US inflation and interest rates https://reut.rs/3Njg1lU

-Reuters