The US dollar continued its upward trend, resulting in declines for the AUD, NZD, gold, GBP, and EUR. Bitcoin briefly fell below US$80,000, marking over a 25% drop since its peak on January 20.

Japan’s inflation data was a key focus, showing a slight decrease compared to the previous month, yet remained near the Bank of Japan’s target. Following the release, USD/JPY initially rose above 150.10 before falling to around 149.11, before stabilising at approximately 149.60.

Chinese stock markets declined after the announcement of a 10% tax on imports from China.

The recent strengthening of the US dollar has put downward pressure on multiple currencies and assets. A stronger dollar often makes commodities like gold, as well as riskier investments, less attractive. This partly explains why gold has lost ground and why Bitcoin dipped below US$80,000. The drop in the largest cryptocurrency by market cap has been sharp, considering it was peaking just a few weeks ago. Some traders had expected support at higher levels, yet the sustained selling suggests there could be further volatility.

In Japan, inflation data came in slightly lower than the previous month but remained near the Bank of Japan’s preferred level. Inflation figures like these are closely monitored, as they influence expectations around monetary policy shifts. When the data was released, the reaction in USD/JPY was immediate. The currency pair initially jumped to 150.10, only to reverse towards 149.11 before settling near 149.60. This kind of movement reflects how traders were likely reassessing their positions in light of the data. Some saw reasons to favour the yen, while others continued to bet on dollar strength.

Meanwhile, market sentiment in China took a hit following newly introduced import taxes. A 10% tariff on Chinese imports is a notable development, as it adds cost pressure on trade. Traders offloaded stocks, expecting this policy change to have a dampening effect on economic activity. Chinese equities had already been struggling with broader concerns, so this additional headwind only worsened the selling.

What this means going forward is that careful attention must be paid to how these trends continue developing. The US dollar remains dominant for the time being, while other currencies and assets adjust accordingly. Japan’s inflation dynamics could shift expectations on interest rates, impacting the yen’s trajectory. In China, the reaction to trade policy changes could extend beyond equities, influencing broader market flows. Every piece of new information has the potential to shift sentiment once again. The past few weeks have been defined by sharp movements, and nothing suggests that will change in the very near future.