Smooth Trump–Takaichi Meeting Triggers Profit Taking in Nikkei and Yen Shorts – Action Forex

Yen rebounded notably today while Nikkei 225 cooled from its record highs, as investors took profits following a smooth meeting between U.S. President Donald Trump and Japan’s new Prime Minister Sanae Takaichi. The summit concluded with the signing of two new agreements that reaffirm the deep strategic and economic partnership between the two allies, while offering little in the way of market surprises.

The first accord — described by Trump as ushering in a “new golden age” of U.S.–Japan relations — builds on the series of bilateral deals signed earlier this year, emphasizing joint investments and defense cooperation. The second, more technical agreement focuses on critical minerals, outlining a framework to secure reliable supplies of rare earth elements essential to advanced manufacturing and clean energy production. Both leaders hailed the outcomes as proof of a durable alliance amid shifting regional dynamics.

For markets, however, the tone was less about fresh catalysts and more about consolidation. Japanese equities eased as traders locked in profits after an exceptional run. Yen’s rebound came as part of a broader defensive tilt across currency markets. With major risk events looming, investors shifted toward safe havens such as Yen and Swiss franc. The move also reflected short-term position adjustments after extended weakness in the Japanese currency.

In the U.S., political attention turned back to the Fed after Treasury Secretary Scott Bessent confirmed that the list of candidates to replace Chair Jerome Powell has been narrowed to five. The finalists include Fed Governors Christopher Waller and Michelle Bowman, National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh, and BlackRock executive Rick Rieder.

Trump said he expects to announce his choice by the end of the year, even though Powell’s term doesn’t expire until May. The incumbent could remain as a Fed governor until 2028 if he chooses not to depart entirely. Markets took the news calmly, viewing the process as orderly but politically significant for the long-term direction of U.S. monetary policy.

For now, traders are tightening positions ahead of Wednesday’s FOMC decision, where a 25-basis-point cut to 3.75–4.00% is fully priced in. With the Fed staying in a data blackout due to the ongoing government shutdown, investors will focus heavily on Chair Powell’s tone for clues on whether another reduction in December remains on the table.

For the day so far, Yen leads the performance board, followed by Swiss Franc and Sterling. Dollar is the weakest major currency, trailed by Loonie and Aussie. Euro and Kiwi sit in the middle. The configuration reflects a cautious pre-FOMC tone.

In Asia, at the time of writing, Nikkei is down -0.78%. Hong Kong HSI is up 0.08%. China Shanghai SSE is up 0.14%. Singapore Strait Times is up 0.60%. Japan 10-year JGB yield is down -0.025 at 1.649. Overnight, DOW rose 0.71%. S&P 500 rose 1.23%. NASDAQ rose 1.86%. 10-year yield closed flat at 3.997. a

New record possibly delayed to 2026 as Gold and Silver enters extended consolidation phase

Gold and Silver came under renewed pressure at the start of the week. Gold briefly dropped below 4,000 mark before stabilizing, while Silver’s decline gathered pace after breaking key retracement support.

The timing of the selloff coincides with the announcement of a new U.S.–China framework deal designed to avert a major tariff escalation in November. The prospect of easing trade tensions has reduced demand for defensive assets, encouraging investors to rotate into equities and risk currencies. Optimism over the pending Trump–Xi summit has also supported broader market confidence.

Markets now await two pivotal events: Fed’s policy meeting tomorrow and the Trump–Xi summit on Thursday. These will likely set the near-term tone for the broader markets, including precious metals. Price behavior around these events will reveal whether the current pullback gathers further momentum.

So far, technical and macro signals both point to a more extended corrective phase than initially anticipated. Rather than a quick pause before resuming the uptrend, Gold and Silver may need to spend the rest of the year to form a base, laying the groundwork for a new leg higher in 2026.

In Gold’s case, the decline still fits within a corrective structure to the rally from 3,267.90. The metal remains above 3,944.57 cluster support (38.2% retracement of 3267.90 to 4381.22 at 3955.93). A rebound from current level and break of 4,161.35 resistance would suggest the pullback from 4,381.22 is complete, targeting a retest of the record high. However, strong resistance is likely to cap gains near the previous peak, keeping Gold confined to a range between roughly 3,944 and 4,381.

However, decisive break below 3,944.57 would bring deeper correction to 55 D EMA (now at 3,818.40) where stronger demand should emerge to form a base.

Silver’s decline has been more pronounced. The metal has already violated 38.2% retracement of 36.93 to 54.44 at 47.75. Still, it remains a correction of the rise from 36.93, rather than a larger one. A drop toward 55 D EMA (now at 45.16) is likely, but solid support is expected there. A rebound through 49.42 would mark the end of this corrective leg and bring stronger rise to retest 54.44.

However, sustained weakness below 55 Day EMA would imply Silver has entered a larger corrective phase to the rise from 28.28.

USD/JPY Daily Outlook

Daily Pivots: (S1) 152.54; (P) 152.90; (R1) 153.23; More…

USD/JPY’s break of 152.25 minor support and then 55 4H EMA (now at 151.95) suggests that rise from 149.37 has completed after rejection by 153.26 resistance. Fall from 153.24 should be then third leg of the corrective pattern from 153.26. Intraday bias is back on the downside for 149.37 support next. For now, risk will stay mildly on the downside as long as 153.24 holds, in case of recovery.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. On the downside, break of 145.47 support will dampen this bullish view and extend the corrective pattern with another falling leg.