Starting in 2026, the US dollar faces pressure. Influenced by the strong appreciation of most major currencies against the dollar last year, the dollar performed weakly on the first trading day of the new year. Meanwhile, the Japanese yen has been hovering near its lows over the past ten months, with markets closely watching upcoming economic data this month to gauge the future direction of interest rates.

The interest rate differential between the US and other major economies has significantly narrowed. This situation in 2025 drove many currencies, including the euro and the pound, to appreciate sharply. Data shows that the euro is currently quoted at 1.1752 USD, with a full-year increase of 13.5%; the latest pound quote is 1.3474 USD, with a 7.7% annual gain. Both have achieved their best annual performance since 2017.

The Japanese yen has performed relatively steadily. The latest quote shows 1 USD = 156.74 JPY, with the yen appreciating less than 1% against the dollar last year, and it once approached a near ten-month low of 157.90. That depreciation once sparked market speculation about whether Japanese authorities would intervene to stabilize the exchange rate.

Since December, Japanese officials have issued multiple strong signals, temporarily halting the yen's decline, but market expectations for potential intervention measures still exist.

Due to Japan and China markets being closed today, trading volume during the Asian session is expected to be relatively light, and exchange rate fluctuations will be limited. However, from a macro perspective, the global economy is entering 2026 with solid growth momentum, and recession risks remain at relatively low levels.