Market Insights January 26, 2026

A complex year ahead for Japan

In 2026, the Japanese stock market remains dependent on the direction of monetary and fiscal policy, as well as the evolution of the yen. Japanese sovereign bonds began the year with significant volatility: long-term yields have priced in a risk premium amid concerns over fiscal sustainability. On the political front, Prime Minister Sanae Takaichi has called legislative elections for February 8 and is advocating a program of fiscal expansion, which includes a two-year suspension of the consumption tax on food, increased defence spending, and a strengthening of industrial policy. This mix exerts downward pressure on the yen, occasionally offset by intervention expectations (as seen this past weekend) and by the prospect of monetary tightening.

At the same time, the Bank of Japan is expected to continue its monetary normalization, driven by more structural inflation and rising wages, increasing the risk of tension between fiscal stimulus and monetary tightening. In this environment of limited visibility, where valuations remain above their historical average despite strong corporate profitability, performance will therefore depend primarily on earnings growth, prompting us to maintain a cautious short-term stance.

Commodities – Promising outlook sustained, but with heightened selectivity!

2026 has kicked off at full speed for commodities, with gains already exceeding 5%, driven primarily by precious metals and a continuation of last year’s trends.

Gold has benefited from particularly supportive fundamentals since 2022. Central banks have continued to diversify their reserves, potentially to avoid facing the same consequences as Russia, thereby reinforcing structural demand. The decline in interest rates further enhances the appeal of gold, an asset without yield but perceived as a safe haven. Moreover, private investors have only marginally increased their exposure to gold despite its price rise, offering additional support for future demand. These factors remain fully relevant, leading us to anticipate another favourable year. On a technical level, gold prices have alternated over the past two years between rallies and consolidation phases lasting roughly four months. This pattern continues into 2026: new record highs reached just before Christmas signalled the start of another bullish cycle, pushing prices above $5,000/oz and CHF 125,000/kg today. Despite the sharp increase, we do not believe that gold has yet entered a phase of extreme speculation. Thus, 2026 is shaping up to be another strong year for the yellow metal, even as volatility is expected to rise.

Silver and copper also posted strong gains in 2025, with notable acceleration during the final quarter. However, it is important to remember that the silver market is narrow and susceptible to manipulation, which adds to its volatility. While fundamental demand remains high, particularly from the photovoltaic sector, we are concerned that the recent rally may be driven more by financial speculation than fundamentals, prompting a more cautious stance. Copper, on the other hand, continues to benefit from solid fundamentals, underpinned by the energy transition and industrial demand. Nonetheless, uncertainty surrounding its tariff treatment in the United States represents a risk worth monitoring.

Conversely, oil is trading near its lowest levels in four years despite a recent rebound fuelled by geopolitical tensions. Rising inventories have weighed on prices, even with OPEC’s decision to cut production quotas. Over the medium term, stagnation in US shale oil supply could shift the balance. Should demand pick up again, supported by resilient economic growth, a new bullish cycle could emerge.

This week’s figure: 20%

Part des sociétés du S&P 500 qui vont publier leurs résultats cette semaine, dont certaines valeurs technologiques phare de la cote, comme Microsoft ou Meta. Ces publications peuvent déterminer la direction des marchés ces prochaines semaine et potentiellement attiser la volatilité sur les bourses.