The recent minutes of a meeting held on Friday revealed a mix of opinions among the members regarding the next steps for monetary policy in JapanUncertainty looms large in the economic landscape, leading to heated discussions about timing and strategySome members advocate for an interest rate hike as early as January next year, while others suggest a longer wait in order to better understand trends in wages and the broader direction of the U.SeconomyA notable comment from one member captured the cautious sentiment: "The central bank may soon decide to raise the policy interest rate, but it is crucial to remain patient until uncertainties surrounding the U.Seconomy are clarified." Despite the Bank of Japan Governor Kazuo Ueda's recent comments that tempered expectations for an imminent rate increase, the minutes indicate that a rate hike in January is still on the tableA number of members expressed the necessity of incrementing rates, with one member pointing out that "given the depreciation of the yen, which could elevate core inflation, preemptive adjustments to monetary easing are warranted." This perspective contrasts with another view that the central bank has reached a point where it "should slightly ease off the monetary easing accelerator." However, the prevailing sentiment among the members leans towards caution

One of them highlighted the importance of confirming the progress of economic recovery, both domestically and internationally, thus supporting the idea that the central bank's current monetary policy should remain unchanged for now.

In addition to the monetary discussions, a recent private survey released on Monday indicates a slowing in the rate of contraction in Japan's manufacturing activity for DecemberThe latest Purchasing Managers' Index (PMI) released by the Bank of Japan showed a final reading of 49.6 for December, reflective of a more moderate contraction than seen previouslyThis figure slightly exceeds the earlier estimate of 49.5 and November's reading of 49.0, yet it marks the sixth consecutive month below the neutral threshold of 50.0. Usamah Bhatti from S&P Global Market Intelligence commented, "The overall data is approaching neutrality, given the slowdown in both production and new orders." The production index contracted for a fourth consecutive month, though at a slower pace compared to the previous month

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Manufacturers cited the reduction in new orders as the primary factor when attributing fallouts in production levelsThis decline in new orders has persisted for 19 months, stemming primarily from both weak domestic and major overseas market demandsSome participating firms hinted at a struggling semiconductor market as a chief reason behind the lackluster new ordersOn a brighter note, December saw a rise in employment numbers, reversing the decline observed in November and reaching the highest levels since April of the previous yearSurveyed businesses indicated an increase in hiring driven by labor shortages and preparations for future demands.

Today's offerings of economic data include the Chicago PMI for December and the adjusted sales of previously-owned homes for November in the United States, both pivotal indicators that investors will be keenly observing.

In the gold market, the last Friday witnessed a volatile trading session

The prices resembled a beaded curtain that seemed to break free from its string, fluctuating lower amidst fierce back-and-forth market actions, with a slight decline in the daily closing priceCurrently, gold is trading around roughly 2622, resembling a small boat adrift on the surface of a churning seaVarious factors appear to have contributed to the downward trend in gold pricesOne major influence is the significant profit-taking after previous gains, akin to receding tides draining capital out of the market, thus creating upward pressures against the currencyAdditionally, the unexpectedly swift cooling of the Federal Reserve’s interest rate cut expectations seems to act as a dampening torch, severely curtailing investor enthusiasm for optimism surrounding gold, leading to a reversal in capital flows that continues to suppress pricesHowever, the road ahead for gold is not overwhelmingly clear-cut

On one hand, the dollar index has been yielding under the weight of persistently weak economic data, thereby offering resilience for gold against declinesOn the other hand, persistent geopolitical tensions—ranging from armed conflicts in the Middle East to strategic contests between major powers—contribute to a haze of uncertainty that fuels risk aversion, thus providing a hard buffer against possible price downturns for goldLooking ahead, the resistance level around 2630 emerges as a crucial checkpoint, while the support threshold near 2610 serves as a critical baseline for any potential price corrections.

The U.Sdollar and Japanese yen market experienced some turbulence last FridayThe dollar-yen pair underwent fluctuations with slight losses, currently hovering around 157.90. Market actions were influenced by profit seizures as well as technical selling pressures near the 158.00 mark

Additionally, the dollar index weakened against the backdrop of disappointing economic data, further contributing to downward pressuresThe hawkish signals emerging from the minutes of the Bank of Japan’s recent meeting also played a role in pushing the exchange rate lowerToday, traders will pay close attention to the pressure levels around 159.00, with support expected at approximately 157.00.

The dollar and Canadian dollar pairing enjoyed an upward trend last Friday, with a slight uptick in the exchange rate trading around 1.4400. The outlook remains supported by persistent expectations of interest rate cuts from the Federal ReserveHowever, concerns surrounding political uncertainties in Canada and fears regarding impending tariffs from the U.Son Canadian imports are also exerting muscular support on the exchange rateDespite this, the weakening dollar index along with recovering oil prices indicates that the upward movements may face limitations