Dollar Dips Amid Trump's Return and Global Financial Speculations

As Donald Trump returns to the White House, investors focus on his inauguration speech to gauge his policies. The yen gained strength anticipating a Bank of Japan interest rate hike, while cryptocurrency markets are optimistic about Trump's support. Trading volume dipped due to the U.S. holiday.

As Donald Trump prepares to step back into the Oval Office, the global financial markets are on high alert. Investors are particularly focused on Trump's inauguration speech scheduled for later today, hoping for insights into his immediate policy direction. Meanwhile, the Japanese yen has climbed, riding on expectations of a potential interest rate hike by the Bank of Japan (BOJ), a move that could raise short-term borrowing costs to highs not seen since the 2008 financial crisis.

U.S. trading volumes are anticipated to be light due to the Martin Luther King Jr. Day holiday, but the cryptocurrency sphere remains active. Trump's recent promises to be a 'crypto president,' alongside the launch of a digital token that briefly soared in value, have buoyed market spirits. In the currency exchange market, the spotlight remains on Trump's policies and potential changes in U.S. tariffs, with some financial experts advising patience post-election.

The market is also closely monitoring geopolitical shifts in the Middle East, after recent prisoner exchanges between Israel and Palestine. Eyes are on the BOJ's upcoming policy meeting, which could see a significant policy interest rate hike—the first since last July. The potential rate change comes amid mixed global economic signals, with the BOJ leadership indicating readiness for monetary policy normalization in the coming days.

(With inputs from agencies.)