Impact of Trump's Election on Japan: Yen, Dollar, Interest Rates, Crypto, and Key Stocks

On the 6th (Japan time), when the US presidential election is underway, the stock market fluctuated drastically while it was reported that Mr. Trump had the upper hand. Trump declared victory in Florida and stated that he would “truly make America great again.” He also praised Elon Musk as a “new star,” and “we will lower taxes. He also mentioned economic policy, saying, “We will do what no one else can do.” Current stock market trends, which include Mr. Trump's victory, will be an important hint for exploring future market prospects. On this day, I will summarize in detail the state of the stock market, which moved drastically due to “Trump's dominance.” In this article, we analyze the impact of Mr. Trump's dominance in the US presidential election on the stock market, exchange rates, interest rates, and crypto assets. I will explain in detail how the Trump administration's policies will fluctuate the market, and notable sectors and stocks.

① The impact of President Trump's election on Japan: yen to dollar

In the morning exchange rate, the depreciation of the yen progressed by about 3 yen from the middle of the $1 = 151 yen range to the 154 yen range at one point. This depreciation of the yen has also had an impact on emerging market currencies, as the Mexican peso lowered its value from 1 dollar = 20.1 pesos to around 20.7 pesos. There is a growing view that if Mr. Trump is re-elected as president, the appreciation of the dollar will progress, and there are a wide range of factors. Specifically, there is an opinion that the tax reduction policy by Mr. Trump and the pressure to cut interest rates on the Fed will stimulate the private economy and support the US economy. Also, there are analyses that higher tariffs will increase inflationary pressure, and views based on stock market trends after Mr. Trump's victory in 2016.

② The impact of Trump's election on Japan: interest rates

The yield on 10-year US bonds showed an increase of 4% or more, from the 4.25% range to the 4.46% range at one point. Along with this, Japan's 10-year government bond yield also rose by about 6% from the 0.92% range to the 0.98% range at one point. It is said that there is a possibility that economic policies such as tax cuts launched by Mr. Trump will lead to an increase in government debt compared to Mr. Harris's policies. Therefore, it is expected that government bond yields may rise further due to concerns about the supply and demand of US bonds.

③ The impact of Trump's election: Bitcoin

Bitcoin soared and hit a record high of 0.07 million5080 dollars at one point. Also, ETH rose by more than 8% at one point. If the Trump administration is established, it is expected that transactions in the crypto asset market will become active from the prospect that regulations on crypto asset transactions will be relaxed.

Since Mr. Trump won again in the US presidential election this year, crypto assets have emerged as a major “Trump trade.” The Republican Party showed a friendly attitude towards the crypto asset industry, gained support from voters, and secured election funds from the Super PAC (Political Activity Committee), which supports politicians who support crypto asset supporters.

“Trump trade” indicates a phenomenon where US stocks, government bond yields, and dollars grew rapidly when Mr. Trump won the 2016 presidential election. Due to this victory, adoption of crypto assets by institutional investors has progressed, and improvements in the regulatory environment are also expected, so it is thought that the price increase of crypto assets will be further boosted.

④ The Impact of Trump's Election: Sectors to Watch

The impact of President Trump's policies on the stock market

From 2016/9, when President Trump was elected, to his inauguration, the S&P 500 index rose by about 84%. This shows that tax cuts and deregulation policies proposed by the Trump administration have had a positive impact on the market.

Trends in Trump-related stocks

The Trump administration's policies, particularly tax cuts, deregulation, trade wars, and strong dollar policies, have had a major impact on the stock market. Corporate tax cuts increased corporate profits and promoted stock price increases. Energy stocks and financial stocks benefited from the Trump administration and achieved sustained growth.

Effects of corporate tax cuts and deregulation

• Corporate tax cuts: The Trump administration cut the corporate tax rate from 35% to 21%, increasing corporate profits. Furthermore, plans to lower the tax rate to 15% have also been reported, and there is a possibility that it will further boost corporate profits.

• Deregulation and dollar policy: Deregulation has revitalized corporate economic activity and strengthened the dollar.

Notable sectors

• Technology companies: Tax cuts and deregulation are boosting tech companies' growth. Despite short-term instability due to trade wars, long-term growth is expected. Also, the Trump administration is seen as being relatively tolerant of cryptocurrencies.

• Energy-related stocks: The Trump administration's energy policy gave preferential treatment to the oil and gas industry. Relaxation of environmental regulations and promotion of pipeline construction have benefited these companies.

• Financial stocks: Relaxation of financial regulations and expectations of rising interest rates have had a positive impact on the financial sector. However, we need to be careful about changes in the Federal Reserve's monetary policy.

⑤ The Impact of Trump's Election: Notable Stocks

Companies affiliated with Mr. Trump himself: $Trump Media Technology Group  (DJT.US)$ $ Phunware  (PHUN.US)$ $ Rumble  (RUM.US)$

Banks and consumer finance companies to benefit from Wall Street capital liquidity deregulation: $JPMorgan Chase  (JPM.US)$ $Bank of America  (BAC.US)$ $Wells Fargo Bank  (WFC.US)$

Financial institutions benefiting from reduced merger and acquisition review activities: $Gold Sachs  (GS.US)$ $MORGAN STANLEY  (MS.US)$ $Evercore  (EVR.US)$

Natural gas producers to benefit from deregulation: $Cheniere Energy  (LNG.US)$ $ExxonMobil  (XOM.US)$ $ConocoPhil  (COP.US)$

Insurance companies that offer a wider range of health coverage: $UnitedHealth  (UNH.US)$ $Hamena  (HUM.US)$

Drug price suppression system risk reduction pharmaceutical companies: $礼来 (LLY.US)$ $M&S  (MRK.US)$

Businesses that benefit from cryptocurrency mining support: $ MARA Holdings  (MARA.US)$ $Riot Platforms  (RIOT.US)$ $cleanSpark  (CLSK.US)$

Semiconductor manufacturers, car makers, and steel makers to benefit from Trump's trade protection policies: $INTC.US  (INTC.US)$ $Texas instruments  (TXN.US)$ $Applied Materials  (AMAT.US)$ $KLEI  (KLAC.US)$ $Ford  (F.US)$ $General Motors  (GM.US)$ $Nucor Steel  (NUE.US)$ $Steel Dynamics  (STLD.US)$

Agricultural machinery manufacturers benefiting from protection policies: $Trtractor Supply Company  (TSCO.US)$ $DEER shares  (DE.US)$