A look at the day ahead in European and global markets

By Gregor Stuart Hunter, Asia Finance & Markets Breaking News  Correspondent

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Japan's Sanae Takaichi, on track to be prime minister and the first female holder of the job, has set pulses racing in Tokyo lately but today she is encountering pushback on her earlier tough talk towards the central bank from the campaign trail.

 An avowed fiscal dove who last year called the Bank of Japan "stupid" for raising interest rates, Takaichi has reined in her previous criticism of the central bank - but is still urging the BOJ to "align" with the government's goal. 

Sanae Takaichi, the newly elected leader of Japan's ruling party, the Liberal Democratic Party (LDP), holds a press conference after the LDP presidential election in Tokyo, Japan, October 4, 2025. Yuichi Yamazaki/Pool via REUTERS

One reason for her watered-down criticism may be the ongoing talks with the ruling Liberal Democratic Party's junior coalition partner Komeito. Another factor is the yen.

Finance Minister Katsunobu Kato today voiced concern about "one-sided, rapid moves in the foreign exchange market" that have pushed the currency 3.5% weaker since Takaichi's election to 153 against the dollar, representing the yen's weakest level in eight months. Market fantasies of a second volley of Abenomics could meet with a reality check.

Someone else who might prefer fewer headaches from the prime minister's office today is Emmanuel Macron, who is seeking to appoint his sixth in two years. In early European trades, pan-region futures were little changed.

U.S. equity futures stabilised after declines for the S&P 500 on Thursday, rising 0.1%, while the U.S. dollar index edged down 0.1%, retracing gains after the political worries in Japan and France pushed the greenback to a two-month high.

Asian stocks limped towards the end of the week on Friday, down 0.4%, as the sense of exhaustion on Wall Street lingered into early trading in the region, while commodity markets took a breather after their recent charge higher.

Chinese stocks tumbled after Beijing expanded its rare earths export controls on Thursday, tightening restrictions over the sector ahead of talks between Presidents Trump and Xi Jinping.

Gold slipped, extending declines after snapping a four-day winning streak on Thursday, shortly after breaching the $4,000 mark for the first time. Spot gold was last trading down 0.3% at $3,964.50 per ounce.

In energy markets, Brent crude slipped 0.4% to $64.95 per barrel, after Israel's government ratified a ceasefire with the Palestinian militant group Hamas on Friday, clearing the way to suspend hostilities in Gaza within 24 hours and free Israeli hostages held there shortly after that.

Meanwhile, the Nobel Peace Prize is due to be awarded at 0900 GMT. Polymarket favours Venezuelan opposition leader María Corina Machado, with a 70% probability. Donald Trump is on 3%.

Graphics are produced by Reuters.

Graphics are produced by Reuters.

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