International markets posted mostly gains this week: Nikkei 225 closing at 58,850.27 (+3.28%), FTSE 100 closing at 10,910.60 (+2.09%), ASX 200 closing at 9,198.60 (+1.29%), CAC 40 closing at 8,580.75 (+0.99%), MSCI EM closing at 62.58 (+0.90%), DAX closing at 25,284.26 (+0.68%), Euro Stoxx 50 closing at 6,138.41 (+0.40%), Hang Seng closing at 26,630.54 (-0.63%). European indices outperformed on average (+1.04%); Asia-Pacific led (+1.31% average); Emerging Markets (MSCI EM) moved +0.90%.

The biggest loser on the FX front was the Japanese Yen, falling 0.97% against the dollar — a headwind for unhedged holdings in that currency. A weaker Yen signals the BOJ's accommodative stance remains intact — the carry trade is still alive. For dollar-based Japan ETF holders (EWJ), this currency drag partially offsets any equity gains.

Bank of Japan policy was the central story this week. The BOJ sits in a uniquely difficult position — the last major central bank still running near-zero rates, its every signal scrutinised for signs of normalisation. A hawkish lean strengthens the Yen and compresses returns for Japan exporters (a large share of the Nikkei), but boosts dollar-based ETF returns on unhedged Japan exposure. A dovish hold keeps the carry trade alive — cheap Yen borrowed to fund higher-yielding assets elsewhere — but that trade unwinds fast when BOJ surprises to the hawkish side, rippling into EM and risk assets globally.

On the data front: Germany Ifo Business Climate (February) beat at 88.6 vs. 88.4 expected. German business confidence ticking up is a tentative positive for European equities — but the index needs to sustain a move higher before it signals a genuine recovery in Europe's largest economy.

Next week's international calendar is active. CPI data across major economies will be the headline print — a hot number extends the central bank hold and pressures rate-sensitive sectors, while a cool read opens the door for earlier cuts; GDP data will test whether growth is holding up under the weight of the current rate environment — weak prints shift the odds toward earlier easing. Central bank decisions in particular can drive sharp simultaneous moves in equities, bonds, and currencies — size positions before the announcement, not after. Secondary releases to monitor: China NBS Manufacturing PMI (February), Eurozone Q4 2025 GDP Final (YoY).

International markets mostly rose this week The best performer was Nikkei 225 (Asia-Pacific) at +3.3%, while Hang Seng (Asia-Pacific) was the weakest at -0.6%. European stocks had a solid week (up +1.0% on average) — a win if you hold European ETFs; Asia-Pacific was the standout region (+1.3% average, with Japan's Nikkei leading at +3.3%); Emerging markets (MSCI EM) gained +0.9% — a positive week for EM-tilted ETFs.

Bank of Japan policy was the central story. BOJ signals drove Yen moves, which ripple through Japan ETF returns for dollar-based investors. the Japanese Yen weakened 1.0% against the dollar — a headwind for unhedged holdings in that currency. If you hold Japan ETFs without a currency hedge, some of those stock gains were offset by the weaker Yen.

Germany's Ifo Business Climate ticked up to 88.6 — a tentative sign Europe's largest economy may be stabilising. Not a recovery, but the direction is improving. The Bank of Japan's minutes showed growing internal debate about raising rates further. If the BOJ does hike, the Yen typically strengthens — good for dollar-based Japan investors, but exporters (a large chunk of Japan's market) can suffer. Eurozone inflation came in as expected at 1.7%. Inflation is on a cooling trend, giving the ECB room to cut rates later in the year — a quiet positive for European bonds and dividend-paying sectors.

Next week brings both inflation and growth data for major economies. Sticky CPI + weak GDP would be a stagflationary signal — defensives over growth regionally. Cool CPI + strong GDP keeps the soft-landing story alive across international markets. Position before the prints.