On Wednesday, both the dollar and bitcoin surged amid speculations of a Donald Trump victory in the U.S. presidential election. The dollar rose significantly against the yen and euro, while bitcoin surpassed $75,000 for the first time. The Tokyo Stock Exchange also experienced notable gains, driven by a weaker yen and positive corporate forecasts. However, Chinese markets remained cautious, reflecting uncertainty about potential trade repercussions and tariffs if Trump wins.
Dollar and Bitcoin Surge Amid Election Speculations
On Wednesday, the dollar experienced a significant increase, while bitcoin achieved an all-time high, driven by the potential for a Donald Trump victory in the U.S. presidential election. The depreciation of the yen also played a crucial role in revitalizing the Tokyo Stock Exchange. As of 04:00 GMT, the U.S. dollar surged by 1.62% against the Japanese yen, reaching 154.07 yen per dollar, and climbed by 1.76% against the euro, settling at 0.9309 euro per dollar. With the U.S. election results producing a nail-biting atmosphere, the foreign exchange market reacted swiftly to the initial victories of former President Trump in several states.
Yugo Tsuboi, a strategist at Daiwa Securities, highlighted the market’s growing confidence, stating, “Investors are beginning to place their bets on Trump’s comeback. His unexpected success in Florida, a populous state, boosts the outlook for Republican performance nationwide.” The U.S. election has led to volatile trading patterns: the dollar saw a sharp decline the previous day following positive polls for Democratic candidate Kamala Harris, only to rebound dramatically with the initial voting results.
Analysts at MUFG emphasized the market’s adaptive nature, noting, “As fresh information surfaces, markets recalibrate.” They predict that the dollar could appreciate by approximately 7 to 8% against the baseline scenario should Kamala Harris emerge victorious.
Bitcoin Breaks Records with Election Optimism
Bitcoin soared past the $75,000 threshold for the first time, propelled by the anticipation of a more lenient regulatory environment should Trump win. After surpassing its previous peak of $73,797.98 from last March, the leading cryptocurrency reached $75,005 around 03:08 GMT, marking an 8% increase. It later adjusted to $74,421 by 04:00 GMT.
During his campaign, Trump committed to establishing the U.S. as “the global capital of bitcoin and cryptocurrencies,” promising a much more relaxed regulatory landscape compared to the Biden administration’s stricter stance. Analyst Nigel Green from deVere noted that Trump’s potential return to power would likely focus on deregulation and policies that favor alternative investments like bitcoin.
In Asian markets, the Tokyo Stock Exchange witnessed a significant upturn around 03:50 GMT, with the Nikkei index climbing 3.09% to 39,664.53 points and the broader Topix index rising 2.13% to 2,720.89 points. This surge was already bolstered by upward revisions in profit forecasts from numerous Japanese companies. The yen’s decline against the dollar enhanced the attractiveness of Japanese stocks and reduced import costs for domestic firms.
Broker IwaiCosmo remarked on the rise of U.S. bond yields and futures contracts, which further fueled the Tokyo Stock Exchange’s momentum. Japanese banks like Mizuho (+4.71%), MUFG (+4.31%), and SMFG (+5.11%) benefitted significantly from these developments, alongside IHI Corporation in the defense sector, which saw a remarkable increase of 13.13%.
Conversely, Chinese markets maintained a cautious stance, with the Shanghai composite index inching up by 0.16% to 3,392.36 points and the Shenzhen index rising 0.57% to 2,059.45 points around 04:15 GMT. Meanwhile, the Hang Seng index in Hong Kong fell by 2.61% to 20,459.26 points. As investors awaited clarity on Beijing’s stimulus plans, the prospect of a Trump election victory cast uncertainty over the region. Analyst Stephen Innes from SPI Asset Management cautioned that such an outcome could trigger aggressive tariffs, leaving China vulnerable and potentially necessitating a swift devaluation of the yuan to mitigate the impact.