After a tech-led rally yesterday, stocks are fairly quiet in the early going today. Gold and silver are mixed, crude oil is up modestly, and both Treasury yields and the dollar are edging higher.
The Federal Reserve may have just CUT interest rates this month, but the Bank of Japan just RAISED them overnight. The move boosted Japan’s policy rate to 0.75% from 0.5% -- which doesn’t sound like much, but IS the highest it has been since 1995.
Japanese rates are the lowest in the developed world because the country was plagued by years of crushing deflation following stock market and real estate busts in the early 1990s. But Japan's 10-year yield has surged to almost 2% recently, as you can see in this chart.
Japanese 10-Year Yield, Discount Rate (10-Yr. Chart)
Data by YCharts
Should US investors “care?” It depends. Cheap Japanese rates have fueled so-called carry trades – plus a flood of Japanese capital into global markets seeking higher yields and returns. See this piece I wrote in August 2024 when a previous BOJ rate move caused tremors in global markets. If Japanese rates keep rising, we could see further bouts of market unrest...though policymakers there are openly telegraphing their moves in an attempt to prevent it.
Will “Stronger Gold, Weaker Oil” be the trend again in 2026? Commodity analysts at Goldman Sachs Group Inc. (GS) say so. They project gold to hit $4,900 an ounce in the new year, while US oil prices sink to $52 a barrel. That compares with around $4,358 and $56.50 this morning. The firm’s analysts say persistent central bank and investor buying will boost bullion, while a lingering glut of oil globally will weigh on petroleum prices.
Finally, we have more deal talk in Hollywood to discuss – albeit not as earth-shattering as the bidding war over Warner Bros. Discovery Inc. (WBD). Sony Group Corp. (SONY) is shelling out $450 million to take a controlling stake in Peanuts Holdings, the firm holding the rights to Charlie Brown and other characters created by Charles Schulz. It will now own 80% of the company, with Schulz’ family retaining 20%.
Sony has been on a buying spree to lock down intellectual property it can use for movies, games, and other projects. It spent $460 million earlier this year for a stake in Bandai Namco Holdings. That company owns video game brands like Pac-Man and Tekken.
