At Any Rate Global FX and Commodities: The bullish case for gold, the bearish case for USD ex-yen and the shutdown showdown
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Oct 10, 2025 
Junya Tanase, a Senior FX strategist at J.P. Morgan, provides insights on Japan's political landscape and its implications for the yen. He discusses the recent LDP leadership change and potential market impacts, including risks of currency intervention. The conversation also covers gold's rapid rally, driven by central bank strategies and supply issues. Additionally, the team analyzes the current U.S. government shutdown and its looming economic repercussions, possibly affecting market stability and data visibility.
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Small Flows, Big Gold Moves
- A modest reallocation (0.5%) from $60tn in foreign U.S. assets into gold could drive prices materially higher.
- Gold's small, price‑inelastic supply amplifies even modest demand shocks sharply.
Reassess Correlations Now
- Monitor evolving gold–dollar correlations closely because relationships are shifting rapidly.
- Adjust hedges and allocation assumptions instead of relying on historical correlations alone.
Fiscal Differentiation Drives FX
- Fiscal differentiation across developed markets is becoming a core currency driver alongside central bank policy.
- Less-indebted currencies (Scandi, CHF, AUD) look structurally more attractive than highly indebted ones (GBP, JPY, USD).