FTSE 100, USD/JPY Forecast: Two trades to watch

FTSE hits another record high, boosted by miners

• Miners rise after Chinese trade data, Gold, Silver hit record highs
• US banks' earnings keep banks in focus
• FTSE at fresh record highs above 10,170

The FTSE has pushed to fresh record highs in early trading, tracking a positive start across most of Europe, and despite a weaker close on Wall Street overnight.

U.S. stocks closed modestly lower, with the Dow Jones underperforming, weighed down by financials due to fears over Trump’s proposed 10% cap on credit card interest rates. JP Morgan fell 4.2% on these worries, and despite posting a Q4 profit beat, although investment banking fees disappointed.

US banks' earnings will remain in focus today, keeping banks across Europe in the spotlight.

Miners are leading the charge higher on the Footsie following the latest data from China, which showed that the trade surplus with the rest of the world reached a record 1.2 trillion in 2025 as exports to the European Union and Southeast Asia surged in response to higher tariffs in the US.

China, the world's largest and second-largest economy, reported a trade balance of $1.189 trillion, up from the 2024 record of $993 billion. The strong results are lifting metal prices.

Precious metals gold and silver are also trading at record highs after data showed that US inflation remained relatively contained, providing support to miners.

On the downside, BP is falling after saying it expects to take an impairment charge of 4 to 5 billion in Q4, mainly related to its energy transition business.

The UK economic calendar is quiet; attention will be stateside on US earnings and retail sales. UK GDP data is due tomorrow.

FTSE forecast- technical analysis

The FTSE has trended higher since April, forming a series of higher highs and higher lows. The price has rallied above 10k to a fresh record high today of 10,170. The RSI is in overbought territory, which warrants caution.

Buyers will look to extend gains toward 10,200 and, on to 10,500, as the following logical levels.

Immediate support is seen at 10k, the psychological level, and 9930, the November high. It would take a break below 9615, the December low, to create a lower low towards 9500.

USD/JPY approaches 160.00 on yen weakness

• Yen weakens on election worries & after a weak bond auction
• US retail sales data due
• USD/JPY trades at an 18-month high

USD/JPY has risen to an 18-month high, driven by yen weakness as investors weigh up the possibility of a snap election in Japan, which could pave the way for fiscal stimulus. At the same time, the government's auction received a cautious market response.

The yen trades at its weakest level since July 2024 following an auction of five-year Japanese government bonds, which attracted weak demand.

This comes amid rising bets that Japanese Prime Minister Sanae Takaichi is considering a snap lower house election on February 8th to capitalise on her growing support and increase her majority in the house. This would be negative for the yen, given her dovish stance on fiscal and monetary policy.

However, as the pair approaches 160, traders are on alert for possible intervention by Japanese authorities to prop up the currency.

The US dollar is holding steady near a monthly high against its major peers after US CPI data were broadly in line with estimates, supporting expectations that the Federal Reserve will keep interest rates on hold this month.

The USD recovered losses from Monday, when it fell sharply after Trump threatened to indict Fed Chair Powell, raising questions about Fed independence. Since then, politicians and central bankers have supported Federal Reserve Chair Powell and asserted the central bank's independence, insisting that it cannot be interfered with.

Today, attention is turning to U.S. retail sales, which are expected to increase 0.4% month over month after a 0% increase in the previous month.

USD/JPY forecast – technical analysis

USD/JPY has recovered from the 154.50 December low, rising above the 157.75 December high to a peak of 159.45, a level last seen in 2024. The RSI supports further upside while it remains below the overbought threshold.

Buyers will look to extend gains towards the 160.00 round number and on to 161.95, the 2024 high.

Immediate support is seen at 158.90, the 2025 high, and below here, the 50 SMA has come into focus at 156.00. It would take a break below 154.60, the December low, to create a lower low.