Real wages of Japanese workers declined in every month of 2025, highlighting persistent inflationary pressure. In December, real wages fell by 0.1 percent, while nominal wages rose by 2.4 percent. The decline in household purchasing power has fueled public dissatisfaction and strengthened support for the expansionary fiscal policies of the Takaichi government. Economists expect real wages to improve in the coming months as inflation, particularly food prices, begins to ease.

Japan’s stock market saw an exceptional rally following the decisive election victory of Sanae Takaichi. The Nikkei 225 rose by about 5.7 percent to a new all time high, while the Topix index also climbed to a fresh peak. Markets expect the new government to pursue expansionary fiscal policies and higher public spending in areas such as artificial intelligence, semiconductors, defense industries, and machinery. Shares of companies linked to these sectors, especially chip equipment makers and defense firms, recorded the strongest gains.

Federal Reserve Board member Christopher Waller said in a speech that some of the optimism that emerged in the crypto market after Donald Trump’s election is fading. He described recent crypto market volatility as normal and attributed it to regulatory uncertainty and risk adjustments by major financial institutions. According to Waller, the growing presence of institutional investors has deepened the crypto market’s ties to the traditional financial system.

Since the early October market crash, investors have pulled about $3.3 billion from Ethereum ETFs in the U.S., with more than $500 million withdrawn this year. Ethereum ETF assets have fallen below $13 billion, the lowest level since July. Ethereum is down nearly 60 percent from its all-time high and has posted negative monthly returns since September. While Bitcoin’s sharp decline has drawn market attention, Ethereum is also under pressure amid weaker risk appetite and tighter liquidity.